In Real Estate, statistics are examined monthly, yearly, even daily, in order to determine overall trends and general health of the Real Estate Market.

For those of you who know me, I rely a great deal on numbers and statistical data to do my job. Numbers are an objective measure to help determine a house’s value, and numbers don’t lie!  Whether you are purchasing a home or selling one, it is important to understand the role the data play in determining the relative value of a home and in determining how many properties may be directly competing with that home as well.  One way to determine this is to calculate the Absorption Rate in a given market.

What is the Absorption Rate?

Simply put, it is an indicator that demonstrates the Supply and Demand in the marketplace. It is the number of months of inventory on the market, and the length of time it could take to sell the current inventory, based on a specific set of parameters, such as house style, age, size and location.

Why is it Important?

You all heard that Supply and Demand affects price. Supply and Demand are variables that we can do nothing about as consumers – they fluctuate up and down depending on the current market.  The variable we can control, however, is price. That is why setting the right price is CRUCIAL  to achieving good results when selling. Conversely, overpricing will hurt a seller’s overall objective – to sell for the most money possible.

How is it Calculated?

First, establish the specific parameters for the market you wish to examine, such as a particular neighborhood, house style and size. Second, find the total number of sales for the past year. Third, take this number and divide by 12 to calculate the total number of sales per month. Next, take the CURRENT number of homes available (not sold and within the same parameters) and divide this number by the average number sold per month. This final number will give you the Absorption Rate in months.

What Does this Number Mean?

If you get a number that is, say 4.6 months, that is generally considered a Balanced market, where Supply and Demand are basically “even” and do not favor either the Buyer or Seller.

If you get a result in the 3’s or lower, that means we are in a Seller’s market, as there are less months of inventory to choose from. Properties tend to spend less time on market, and there may be a greater likelihood of multiple offers, as buyers are competing over fewer properties.  If these conditions persist over a period of time, it may also result in a higher average sale price as well.

If the number that you come up with is 7 or higher, it is safer to say you are in Buyer’s market.  Properties take longer to sell and may sell for less money if these conditions continue over a period of several months. It is critical to price a property accordingly or it will sit on the market and  depreciate over time, becoming less valuable to the Buyer.

If you would like to know the Absorption Rate for your area, I would be happy to help! Contact me, and I will pull the data for your area, help you determine what kind of market you are in, and advise accordingly!

Your home is quite likely your most valuable asset. We live in a time where Interest Rates are low, and inventory is (relatively!) high. You might be thinking of buying a home in Edmonton or Sherwood Park for various reasons. It might be due to change in lifestyle, such as the kids moving out of the house, a new baby on the way or any number of factors. But without having your financial ducks in a row, it can be increasingly difficult to purchase a home. Here are some questions you need to consider, during during or before getting pre-approved for a mortgage:

1.) What is your credit score?
Banks and lenders use this score to determine your financial worthiness when obtaining a loan. It is a 3-digit number that is basically a measure of how trustworthy you are with money. The higher the score, the more banks/lenders will like you and be willing to work with you in securing a mortgage. If your score is low, there are steps to take to improve your score. But, it won’t happen overnight, It takes time.

2.) How much equity do you have in your current home?

Equity is the difference between what you paid for your house versus what it is worth now. Generally, over time your equity will increase. However, if you bought at the wrong time and your house is now worth less, or if you have been borrowing against the equity of your home to pay off debt, you may find yourself with little equity left, and this will affect your purchasing power.

3.) What is your current home worth?
If you own a home already, having an idea of what your current home may sell for is very helpful in the pre-approval process as mentioned before. Be sure to get a professional opinion from a licenced Realtor (R) as property assessments may not be accurate. Your perceptions may also not be accurate. Knowing the approximate value of your home beforehand will provide a more realistic picture of the equity you may have after selling your home.

4.) What kind of lifestyle do you want?
Knowing what kind of lifestyle you want to have is key. Do you like to travel? How many vacations do you want to take in a year? Do you have kids going into Pose Secondary School? Are you expecting to expand your family? You don’t want to put all your eggs into one basket (your house) and leave little room for any of the finer things in life. These are just of the questions that only you can answer, and need to ask yourself when analyzing the amount that you want to spend on your next home.

5.) Do you have an Experienced Mortgage Advisor?

Having an experienced Mortgage Professional who handles your mortgage can make all the difference in the world. Carrying out a thorough pre-approval can prevent disappointment and wasted time for everyone. A true pro can handle most situations with ease and will keep you informed throughout the process, leading to a positive outcome for everyone! I can help you with recommending someone who will help get the job done with knowledge AND experience!

Do you have more questions about whether you are financially ready to take the next step? Call me today and let’s get the process started!

This year, my husband and I decided to put our Sherwood Park house on the market. Now, you would think this would be a piece of cake for me, After all, I have been trading in Real Estate as a Realtor (R) for almost 10 years now, so you would think I would have this down pat. Well, the truth is, I now have a new found appreciation for Sellers after seeing the selling process from a Seller’s perspective. Here are some insights I gained along the way – enjoy!

1.) Your house can never be “too clean”.
This is something I obsessed about constantly to the point where my teenaged daughter called my “Psychotic” because I was constantly cleaning the house. Does it have to be perfect? No, but it is sure something to aspire to minutes before the buyers arrive!

2.) It’s a real hassle when you have a pet.
Now, don’t get me wrong, I love my dog. She is part of the family. But driving around in the car while your dog is anxiously wondering where you are taking her (only to return home!) is fine for about 10-15 minutes. Not an hour.

3.) You really start to notice how much cr*p you have.
All that junk you have stored in your basement? Yes, it was taking up precious square footage of your home all this time. Some of it may still be in sealed boxes from the last move! But…. it is sooooo therapeutic to purge it out of your house for good. Just DO IT!

4.) You can NEVER have too many boxes!
It’s amaziing how many boxes you need to move just one room of a house. So, get as many boxes as you can get a hold of, and contact people who have recently moved and offer to pick up their boxes as they unpack. It can save you hundreds of dollars and make the whole process of packing easier. I did purchase a “China set” moving kit this year, and it was worth every penny. Saving time also saves money.

5.) Even though you are looking forward to good times in the new house, you will feel sad about leaving old friends and neighbors behind. Bricks and mortar may make a home, but it is the memories from the people you interact with that matter the most. I watched my girls grow from young girls to teenagers in this house. I remember when they rode on their bikes in the cul-de-sac and played tag in the front yards with their friends, and made s’mores over the fire in the back yard.  Those days are long gone now, but the memories remain.

Is it all worth it? Yes, it is! Let me help you with your next move, whether you are moving to a different community, upgrading or downsizing, I would love to help you sell your home and find a new one! Contact me, and let’s get started!