Salt Lake City Real Estate Statistics
Salt Lake City Real Estate Statistics
Throughout the end of the year I am going to post some statistical information about Salt Lake City Real Estate each Saturday. I find that home buyers and home sellers, as well as home owners like to know what is happening statistically in their local real estate market. Statistic can be presented in different ways and formats. I will try and make them meaningful and interesting. Please email me at firstname.lastname@example.org if you are interested in a statistic or area I don’t address.
I begin this Saturday Salt Lake Real Estate statistic with explaining the significance of a statistic I will often refer to, which is the absorption rate. The absorption rate is a different and more honest way to evaluate DOM or days on market. Almost everyone is interested in the days on market statistics. The problem is that many agents, even sellers, try and skew the published days on market. They feel longer days on market cause them to have to accept a lower selling price. In our Salt Lake City, Wasatch Front MLS, builders mess with this number in developments, perhaps for justifiable reasons, by taking a home off the market for 60 days, replacing it with a similar model. Yes, our local MLS rules are that the combined days on market are not counted if a home is off the market for 60 or more days. I have to laugh as I discovered an agent selling a home in South Jordan kept cancelling a listing and then re-listing it the next day. I spoke with the seller for that one short day it was off the market, they had no idea that this was going on. In their inquiry they discovered the agent thought it was re-setting the days on market number visible in the MLS. I thought, “my what a devious soul, is this someone to trust?”
Understanding that DOM or days on market statistics can be manipulated to be skewed lower than the actual fact it is possible to determine the DOM number a different way. It is the absorption rate. It is simple to calculate. Find out home many homes sold in your market in the last year and how many are currently on the market. For example if there were 10,000 homes sold in the past 12 months, and at this current time there are 5,000 homes on the market you know that the home inventory turned twice in those 12 months. As there are 12 months in a year you complete the calculation by dividing 10,000 by 5,000 resulting in the number 2 and you have calculated the absorption rate to be 6 months or 180 days (6 x 30days). Figuring days on market using this method will eliminate the manipulations by tricky builders, agents, and sellers.
What then is the absorption rate statistic for homes for sale in Salt Lake City, Utah? This statistic is more meaningful when broken into segments relative to the home or condominium your might be studying. For this article I will use an example based on a condominium I closed on for clients yesterday in Downtown Salt Lake City. It sold for $239,000. The four zip codes that have a relative close location to downtown Salt Lake are 84101, 84102, 84103, and 84111. Some of these are large in area and not quite walkable to downtown, but close, and walkable to you who are in great shape. I will calculate the absorption rate putting the subject condo in the middle range by calculating condos in these zip codes from $200,000 to $250,000. These are all in Salt Lake County and Salt Lake City. I could further dissect this study by specifying size and other features.
In the last 12 months there were 65 sold properties that meet these factors and there are currently 24 active properties with this criteria. Using our math formula the absorption rate is 5.42 per month, times 30 days, resulting in the days absorption rate being 162.6.
Our Wasatch Front has made this into a statistical search we REALTORS ® can quickly create. It provides this statistic in a helpful graph, it presents it in a 2, 3, 4, 5, 6, and 12 month number which is extremely helpful in visualizing trends. I am posting that in the photo below. You might note that all of the last six months calculations are better for home sellers than the yearly calculation, indicating that the last half of these 12 months has been better for this markets condominium sellers than the first half.
How do I recommend that you use this number? Be you a buyer or a seller you can set reasonable expectations on how you look at a sale or purchase. It helps in deciding what price to put on your home. The condo I used in the illustration sold in 22 days, far exceeding these numbers. You could determine why and is that important. Is it a function of my marketing or was it a function of the building? We could do this calculation for the specific building, Canyon Road Towers. Canyon Road Towers is walkable to City Creek Mall and Temple Square. I could have taken the time to eliminate all in the zip codes I used that weren’t as convenient a walk.
This is an important statistic. There are others. I invite you to ask any of our MediaOne Real Estate agents to set down with you and produce these numbers that are specific to your situation, be you a buyer or a seller. We can all be found on this website. Referring them to this article will help.
by Larry K Cragun, REALTOR®
MediaOne Real Estate
4770 S 5600 West Valley City, UT84118Phone: 801-204-6000 URL of Map
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