Pricing To Sell in St. Charles, IL: Consider the Absorption Rate

By
Real Estate Agent with Baird&Warner Fox Valley

Homeowners in St. Charles, IL who are thinking of selling their home need to consider the amount of inventory that they will compete with. Inventory sounds like boxes in a warehouse, but a successful seller needs to "think like a buyer" who is evaluating all the choices he has on the market. Realtors speak of "inventory uptake", or "absorption rate" which is the number of days or months or years it will take to sell off the current inventory at the current rate of sales.

Let's look at a real price point in St. Charles, IL: homes priced at $450,000 to $600,000. There are 109 active listings and 10 under contract. There have been 50 closed sales in the past six months. The absorption rate is 13 months, the amount of time it will take to sell off the inventory at 8.33 houses per month.

The analysis of the closed sales shows even more relevant data. A good proxy for value in a problematic market is assessed value (what the tax assessor says your home is worth). The assessed value of the closed sales shows that the houses that sell have an assessed value proportionately greater than the listings still on the market.

Houses at this price point in St. Charles, IL sell when they are priced at about 80% of assessed value. Put more simply, when a house sells for $550,000, it is a home valued at $700,000. The absorption rate of houses priced at 80% of assessed value is 30 days. The absorption rate of houses priced at 100% of assessed value is 10 months. Unfortunately, the absorption rate of houses priced at 120+% of assessed value is pretty much "never".

If you are thinking of selling your home in St. Charles, IL, you should know the absorption rate for your price point. All real estate is local, so if you would like help figuring out what your home is worth, and what you should do to sell it in today's market, give me a call and let's talk.

 

Homes Sales in St. Charles, IL

Dynamic Chart Shows 3 Years of Sales Data

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This post was written by Leslie Ebersole of Baird & Warner Real Estate.
Use or reproduction of the material published on this site is expressly prohibited
without the express written permission of the author.

 

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Rainmaker
311,259
Glenn Roberts
Retired - Seattle, WA

The absorption rate is good data to take with you to a listing appointment. Sellers are too aware of national articles that they like, but their specific neighborhood hold the key the the value of their home.

Oct 19, 2010 10:12 AM #1
Rainmaker
420,999
Leslie Ebersole
Baird&Warner Fox Valley - Saint Charles, IL
BRIX Group

Glenn, thanks for the reinforcement. I am working on simplifying the real estate jargon in my materials. I will also be turning this into a handout for the seller package.

Oct 19, 2010 10:22 AM #2
Rainmaker
423,621
Denise Hamlin
Cardinal Realty - Locally Owned Real Estate Company - Iowa City, IA
Real Estate & Relocation Services 319-400-0268

Hi Leslie ~ Absorption rate is a tough one to explain. Good job in breaking it down in a way that non-real estate professionals will understand. Interesting how the assessed price plays into the time on market too. As Glenn says, real estate is local. Ultimately what's going on in the national market is of little relevance to the buyer or seller's local area. For anyone moving the St Charles, IL area this is the kind of data they need.

Oct 19, 2010 10:35 AM #3
Ambassador
2,496,601
Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Good advice, Leslie.  I've started feeding assessed values into my CMA pricing formula. 

Oct 19, 2010 10:41 AM #4
Rainmaker
490,236
Ken Tracy
Charles Rutenberg Realty - Naperville - Naperville, IL
Naperville Illinois Real Estate

Hi Leslie. I am always impressed by your posts.

Very clean and professional...

Thanks for writing,

Ken

Oct 19, 2010 12:07 PM #5
Rainmaker
1,333,424
Carla Muss-Jacobs, Principal Broker/Owner
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% o... - Portland, OR
Buyer Focused ~ Buyer Results

Supply and demand.  You've done a nice job "illustrating" the point.  :-)

Oct 19, 2010 01:54 PM #6
Rainer
87,686
Rich Edgley
Greater Chicagoland Home Inspection - Saint Charles, IL

Leslie-

You are on fire with your blogging.  I finally got a chance to sit down and read.  great work.


Rich

Oct 24, 2010 06:29 PM #7
Rainer
172,614
Lisa Orme
The Master's Key Realty LLC -Windsor, CT - HARTFORD COUNTY - Windsor, CT
Broker/Realtor, ABR, CRS,GRI, PSCS, SFR, Notary Pu

Nice job on absorption rates - and your graphs are WONDERFUL for getting your points across. Nice job! 

Oct 24, 2010 10:56 PM #8
Anonymous
Anonymous

Thank you for this!  Where did you get your charts from?

Dec 30, 2010 11:04 AM #9
Rainmaker
420,999
Leslie Ebersole
Baird&Warner Fox Valley - Saint Charles, IL
BRIX Group

#9; I see that the Altos Research chart is missing. Dont' know why the link is broken. In any case, go to Altos Research.com or send me your email address and I can get you all kinds of charts!

Dec 30, 2010 12:23 PM #10
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Rainmaker
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Leslie Ebersole

BRIX Group
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