From the Allison Ziefert Real Estate Group
One of the key metrics that real estate agents review to gauge the state of the market is the absorption rate. Absorption rate tells us how many months it would take to sell all of the currently available homes on the market if no new properties were listed. It’s a good indication of whether it’s a buyers’, sellers’, or balanced market.
The absorption rate is calculated by taking the number of sold properties in a certain time frame (we will use the last 3 months) and dividing that by the number of days in that timeframe to figure out how many properties sell in an average month. Then the total number of homes for sale is divided by that number, allowing us to see how many months it will take to “absorb” the current inventory. In a balanced market it would take 5-7 months to absorb the homes on the market. Fewer months would be a sellers’ market, and any more would be a buyers’ market.
You will see from our latest SOMA market reports that the average 3 month absorption rate in the two towns indicates a very strong sellers’ market. In Maplewood, there is less than one month of supply on the market and in South Orange just over one month supply– down about 60% from the average 3 month absorption rate this time last year. In all of the communities around SOMA there is 40-60% less supply on the market than at this time in 2019.
October 2020 Real Estate Market Reports for Maplewood:
October 2020 Real Estate Market Reports for South Orange:
What does this mean for you as a buyer or seller? Well, for sellers this means there are more buyers out there than houses, which is a very favorable combination as far as the sale price and terms that your home can command. For buyers, it means a lot of competition for each house and frequently losing several homes before getting an acccpetd offer. Watch this video where Ginge Calhoun from our team summarizes our findings.
Our team covers towns outside of Maplewood and South Orange. One of the perennial favorites with our client base is Montclair. More than ever, video is a helpful tool in our business, so we created a video tour of the community. For many of the same reasons people are drawn to SOMA they gravitate to Montclair– for its culture, diversity of housing styles, and shopping and dining choices. Click here to watch some Montclair residents speaking about why they love their town. Feel free to share this with someone you know who is considering a move to Montclair.
Are you thinking about capitalizing on the lack of inventory in SOMA? Feel free to reach out to me for a confidential discussion.
The Allison Ziefert Real Estate Group is a top producing real estate team based at Compass in Short Hills, NJ. We are local market experts, specializing in real estate and homes in Maplewood, South Orange, Millburn/Short Hills, Montclair, West Orange, NJ and the surrounding towns. We are driven by earning great testimonials and referral business from happy clients. You can read our testimonials at www.azhomesnj.com/testimonials.