With homes on the market for 6 months, a year, even two years, you may have started to hear talk about the market in terms of “Absorption Rate”.  The absorption rate is the time it takes to “absorb” an individual home into the market.  Another way to state the same concept is that the absorption rate is the answer to the question of “how many months of inventory is currently on the market?”  It’s simply a mathematical representation of supply and demand.  The computation can be simple or complex.  I’ve seen absorption rates calculated a couple of different ways.  You can have variables in time, or by zip code, by price range, or by subdivision.  Simply put: The total number of available homes, divided by the total number of sales the previous month, results in the absorption rate.

I think that for the best overall view, to have real meaningful results, we start a little wide, looking at the general area.  We then look at your neighborhood and price range.

The Greater Cincinnati Multiple Listing Service states that a “Balanced Market” is 4 – 5 months of inventory.  A seller’s market is a 1 – 4 month absorption rate.  A buyer’s market is a 7+ months of inventory.

Let’s take a look at the current absorption rate for a couple of Greater Cincinnati’s communities, with information current as of this writing.
Starting with the Union Township and Eastgate area in Clermont County:
Total number of available homes: 269
Total number of homes under contract in the last 30 days: 27

Absorption Rate: 269 / 27 = 9.96 months

Let’s take it to a neighborhood of homes valued about $175,000 – $220,000.
Total number of available homes: 45    45 Homeowners competing for the same buyer!
Total number of homes under contract in the last 30 days:  5   

Absorption Rate: 45 / 5 = 9 months  Definately a Buyers Market!

Driving up and around I-275, to I-75 checking on homes located in the Mason School District to compare.
Total number of available homes:  379
Total number of homes under contract in the last 30 days:  40

Absorption Rate: 379 / 40= 9.48 months

Let’s take it to a neighborhood of homes valued about $350,000 – $450,000
Total number of homes available: 37
Total number of homes under contract in the last 30 days: 5

Absorption Rate: 37 / 5 = 7.4 months  Still a Buyers Market!

Carefully considering the absorption rate for your area, combined with information about “DOM”, pricing strategy, & market exposure, your home will sell in a timely manner.  Now is not the time to “just see” if the precious few buyers will meet your price, IF your asking price is not supported by market statistics.  So, do the math. Are you willing and able to make 6, 8, 14 more house payments, or delay your move by  7, 9, 15 months?

If you have any questions about your specific neighborhood, just let me know. I would be happy to obtain that information, and forward it to you. The Real Cincy Group can assist with your sale in both Ohio and Kentucky.

More Cincinnati real estate information can be found at RealCincy.com