It is an inviolate tenet of real estate. When selling a property, one must determine whether it is more important to sell a property quickly and possibly accept less money, or to hold on for a longer time to get a higher price.
And one can statistically estimate for a seller what those time frames might be for different pricing points. By analyzing the overall days on the market against final sales prices one can generate a representative are market survey.
This method of analysis can also be used by potential buyers that are holding out in an effort to purchase the best property at the LOWEST price?
The technical term is how long it takes to sell a property is known as the “absorption rate,” and it is probably the best indicator of how long a buyer might wish to hold out when considering a purchase.
Very simply stated, the absorption rate is the number of statistical weeks that it takes to sell a property in a particular price range. If the absorption rate is low, holding out probably won’t help much.
However, a very high rate can be an indicator to take a bit more time finding just the right house or to offer less money for a “settle-for” property. It is a true supply and demand indicator.
So whether one is selling or buying real estate, market statistics can be very helpful tool for making a correct business decision.
Because good statistics can save you time OR money!
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