Today we're going to answer one of the most common questions that we hear and that most real estate agents hear from just about everybody, and that's: How is the market?
Is the market hot?
Is it slow?
Are things selling?
How quickly are they selling?
I pulled some key data in a very specific neighborhood that gives a great measure for how Lakewood Ranch is doing overall.
We will take it back six months from the last quarter of 2022 through the first quarter of 2023, and show you what's going on.
Looking At Metrics For Country Club
A great way to figure out what's happening in Lakewood Ranch is to focus on one neighborhood in particular, and that's Country Club.
The reason that I say that is Country Club is a fully built out neighborhood. There is no more new construction there, and it's very, very large.
It's one of the biggest neighborhoods in the entire area.
So by taking metrics of the entire neighborhood for the last six months, we can see how resale is doing, what the price point is, the average price per square foot, what's selling, and what's not.
The Absorption Rate At Country Club
And then there's this little measure that the real estate industry uses called the absorption rate, and that is going to tell us how quickly homes sell and whether it's a buyer's market or a seller's market.
I looked up absorption rate calculator in Google and found this article on Rocket Mortgage's website, and it's pretty self-explanatory...
Link to full article
A market with an absorption rate above 20% is typically called a seller's market and below 20% is a buyer's market.
Another way to look at it is how long does it take to sell the current inventory?
Generally speaking, six month's worth of inventory is considered a balanced market. It's neither buyer nor seller.
What Does The Current Market Tell Us?
The goal here is to figure out that number, as it relates to Country Club in Lakewood Ranch.
In Country Club, right now there are 33 active listings, 33 properties total that are for sale.
That includes primarily single family, but there are some villas, which are side by side units. There are also some townhomes or condos.
For the purpose of this exercise, we are using all the current listings.
The average sale is a three bed, three bath house, 2,755 square feet.
The average list price of these active listings is $1.14 million,
and the average days on market as of today is 60.
Now let's take a look at what's currently pending... all properties that are for sale right now within Country Club that have an executed sales contract, they are "under contract".
Going back six months, 180 days.. we have 17 homes in Country Club under deposit.
The average is 3 bed, 3 bath, 2,700 square feet, which sounds familiar to the active listings.
$1.13 million is the average list price of those homes that are under contract..
S just under $400 a square foot, and it looks like the average days to contract is between 40 and 50.
Canceled And Expired Listings
All right, now let's look at canceled, withdrawn, and expired listings.
There's a total of 20, from the last quarter of 2022 to the first quarter of 2023, there's only 20, which is not much.
The expireds tell a better story of failure, for lack of a better word because those properties tried to sell, and did not give up. They just didn't sell.
Canceled and withdrawn listings could be a little bit different and might have unique circumstances of the seller; maybe they decided they just didn't want to sell any longer and took the property off the market.
But for this exercise, I'm not going to differentiate.
We're just going to count this number: 20 total properties that did not sell over the last six months that were on the market for sale.
Pulling It All Together: What Do These Numbers Tell Us?
Now let's look at the sold properties over the last six months in Country Club...
Okay, so we have 55 total properties.
The average was a 3 bed, 3 bath, 2,678 square foot
Average list price just under $1.1 million
Average close price looks like it was just under $1.05 million.
This all seems pretty consistent with the other data.
The average days on market shows 42 to contract and 92 days to the closing.
All very good statistics for a seller.
The Real Markey Measure: The Absorption Rate - Q1 of 2023
Now, let's dig a little deeper into those numbers and put them in relation to each other so we could see what the absorption rate is.
To calculate the absorption rate, we take the total number of homes sold over the last six months in Country Club...
which was 55,
and divide that by six months. (55/6 = 9.16)
So 9.16, or just over nine homes per month sold in Country Club over the last six months.
Currently, there are 17 active listings.
So... The final question is "How long will take to sell those 17 homes given the absorption rate of 9 homes per month?"
The current 17 homes will only take two months to sell!
Another way to calculate the absorption rate is to put it into a percentage. And 9 divided by 17...
... puts the absorption rate at 53%.
Typically if the absorption rate is between 15 to 20%, that would be a more neutral market.
Anything over 20% indicates a seller’s market.
We are at 53%, so the Lakewood Ranch market is still seriously HOT and not slowing down.
Lakewood Ranch: Upwards Growth Trajectory In A HOT Seller’s Market
The proof is in the data. Sometimes it's easier just to focus on the numbers, which is why I wanted to do this exercise with you.
Lakewood Ranch is going to continue to grow, especially east and south.
We're currently only 65% built out, so there are options and opportunities for new construction and there's plenty of options for resale.
If you're considering a move to Lakewood Ranch, give us a call.
We'd be happy to chat with you, provide some guidance, answer any questions that you have, and we can work together to find the perfect home for you.