This savvy homebuyer and home seller guide to real estate will help you navigate the Gainesville FL real estate market. If you’ve decided to buy a home in Gainesville Florida, congratulations! Investing in real estate — over the long term — is one of the surest ways to increase your wealth.
Besides the most important things to consider when choosing your home….location, amenities, school district, distance to work, etc…..what other factors should you take into consideration?
Importance of absorption rate
One of the factors often overlooked in a homebuyer’s decision-making process is the absorption rate, which looks at the supply of homes vs. the demand for homes in any specific area.
A normal or balanced market is when there’s 5 months of housing inventory.
A buyer’s market is defined as a market where there is more than 5 months of housing inventory – or more than 5 months’ worth of homes to sell in a given area or at a given price point.
A seller’s market is a market where there is only 1-4 months worth of housing inventory available in an area or price point.
Have you heard the saying that all real estate is local? Well, that’s true for absorption rate as well….
Consider the following:
In all of Alachua County, as of today (June 26, 2009), there are currently 1,582 single-family homes available for sale.
In May of 2009, 154 single-family homes sold in all of Alachua County.
In terms of absorption rate, this means it would take 12.4 months to sell all 1,582 homes if all other factors remained the same (e.g. no other homes came onto the market).
Breaking down home sales by price point
There are 822 single-family homes for sale in Alachua County priced at less than $200,000 (9.45 months of inventory).
There are 800 single-family homes for sale in Alachua County priced between $200,000-$400,000 (14.29 months of inventory).
There are 177 single-family homes for sale in Alachua County priced between $400,000-$600,000 (16.09 months of inventory).
There are 68 single-family homes for sale in Alachua County priced between $600,000-$800,000 (68 months of inventory!)
There are 57 single-family homes for sale in Alachua County priced at $800,000 or more. No homes sold at that price point last month, so I’m not sure how to even begin to calculate how long it will take to sell them all.
What do these price point breakdowns mean for the savvy homebuyer in the Gainesville real estate market?
It means that homebuyers are in the driver’s seat and have much more leverage than sellers do in terms of determining the selling price of the home. Homebuyers who are financially qualified to purchase a home for $600,000 or more have the most inventory to choose from and therefore the most leverage in determining selling price at these levels.
What do these price point breakdowns mean for the savvy home seller in the Gainesville real estate market?
- If you don’t have to sell right now, don’t.
- If you do have to sell, price your home competitively right from the get-go.
- Even if you price your home as competitively as you think you can, be prepared to take a financial beating.
- What you think your house is worth is, on the whole, less important than what a financially qualified buyer who is ready, willing, and able to buy your home thinks it is worth.
Breaking absorption rate down by region
Northwest Gainesville homes for sale
685, or 11.81 months of inventory
Southwest Gainesville homes for sale
455, or 9.68 months of inventory
Northeast Gainesville homes for sale
113, or 14.12 months of inventory
Southeast Gainesville homes for sale
55, or 9.16 months of inventory
What does this information mean for the savvy homebuyer of Gainesville real estate?
The more months of inventory available for sale, the more leverage the homebuyer has in determining price and terms for the property.
What does this mean for the savvy homeseller of Gainesville real estate?
Review the information above and commit it to memory.
I hope this savvy homebuyer and home seller guide to Gainesville real estate comes in handy as you are making your buying or selling decisions here in Gainesville Florida. Factoring in the numbers of the real estate market into your decisions and not just going on feelings can serve you well in the long run.