Last Updated on March 31, 2024

What is Desirability? | Real Estate Definition

By Alan F Macdonald

What is Desirability? | Real Estate Definition

What Does Desirability Mean?

In real estate, desirability is a metric used to describe how well a certain area meets the needs of its population. Desirability is used on to explain how popular an area is with the people who already live there.

Real Estate Agent Explains Desirability

Desirability is measured as a ratio. Because some neighbourhoods have more homes than others, using a ratio or percentage allows comparison between different sized neighbourhoods.

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    For example: An excellent desirability score of 90/100 means that 10% of people want to sell their home in a given year. That is, 90% of people in the area do not want to move – they are content where they are.

    To clarify, desirability is a measurement of how owners feel about their homes; it does not describe how buyers feel. Desirability is a measure of the number of homes for sale, not just the homes that have sold. Whether the home sells or not isn’t important. The fact remains that the owners do not want to live in that home anymore – and that tells us something about a neighbourhood (the best ones tend to have lower turnover!)

    This measurement basically shows how some areas have more real estate listings than others. Those areas with more listings show that the area does not meet the needs or wants of all the people living there.

    Desirability has two counterpart metrics – buyer willingness, and absorption.  Buyer willingness and absorption together describe how buyers feel about an area.

    Why Does It Matter?

    When people live in a neighbourhood for a long time, it means that they are content with their home or investment property. If a person’s situation changes, he or she may have to move because of a job, a or a need for more or less space. When someone lists their home for sale, they are looking for something more desirable to them. More desirable areas are just areas where more people are comfortable for longer.

    Desirability can affect housing prices because very desirable areas will have a short supply of homes for sale and less desirable areas will have a high number of homes for sale at one time. Fewer houses for sale means prices should be higher in that area.

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