What is an Absorption Rate?
Absorption rates give you an idea of the supply and demand in a given market for a specific time period. It is easily calculated for a given month by looking at the number of homes for sale and dividing how many actually sold that month. A balanced market (or equilibrium area) is usually determined to be around a 5-7 month absorption rate.
For example: If there are 5000 homes for sale and 500 sold in one month. The absorption rate would be 10months (5000 divided by 500).
Related posts:
Like this post? Leave a comment or subscribe to the RSS feed and stay up to date on future articles.



Comments
No comments yet.
Leave a comment