Homes priced below $500,000 sell quicker than more expensive properties.

What’s the current state of the market? This is one of the most common questions we get from both buyers and sellers. To provide a comprehensive answer, we’ve reviewed the market data for single-family residences from the year’s first six months, focusing on the absorption rate, which is a critical measure of how quickly homes sell in different price ranges. Here’s everything you need to know:

• Absorption rate explained. The absorption rate is an essential metric for understanding the speed at which homes are being sold. For example, if there are 100 homes for sale and 50 of them sell in one year, the absorption rate would be two years for the entire 100 homes to sell. This rate helps both buyers and sellers gauge the current market dynamics.

• Homes below $500,000. For homes priced up to $500,000, the absorption rate is about four months. With 129 homes for sale and 201 sold in the first six months, the market in this range is quite robust. Homes in this price range tend to sell quickly, indicating a strong demand.

• Homes priced between $500,000 and $1 million. As we move into higher price ranges, the absorption rate begins to taper down. Homes priced around the $1 million mark have an absorption rate of over a year, and this rate increases as prices rise.

For both buyers and sellers, knowing market trends is key to making smart moves.

• Homes above $1 million. For homes priced above $1 million, the absorption rate extends beyond a year and can reach up to two years. For even higher price ranges, the rate can go up to three years. This data suggests that higher-priced homes may sit on the market longer, potentially allowing more room for negotiation for buyers.

• What sellers should do. If you can price your home to fall into one of the stronger categories with a quicker absorption rate, you may avoid the frustration of a home lingering on the market. Adjusting your price accordingly from the start can help you sell faster and meet your expectations.

• Strategies for buyers. Buyers, on the other hand, can take advantage of these market dynamics. In price ranges with higher absorption rates, there may be more room for negotiation, allowing buyers to secure a better deal. Understanding these nuances can give you a strategic edge when making offers.

I hope you find these insights helpful. This mid-year market report provides a snapshot of the current real estate landscape. To help you make better decisions, we’ll be doing another analysis at the end of the year to compare how the two halves of the year stack up and see how market conditions evolve. If you have any questions or if you need help in buying or selling a home, reach out to us at 406-837-5531. I look forward to hearing from you!