Absorption Rate

    This is the rate at which available homes are sold in a specific real estate market during a given time period. It is calculated by dividing the total number of available homes by the average number of sales per month. The figure shows how many months it will take to exhaust the supply of homes on the market. A high absorption rate may indicate that the supply of available homes will shrink rapidly, increasing the odds that a homeowner will sell a piece of property in a shorter period of time. For example, suppose that a city has 1,000 homes currently on the market to be sold. If buyers snap up 100 homes per month, the supply of homes will be exhausted in 10 months (1,000 homes divided by 100 homes sold per month). If a homeowner is looking to sell a piece of property, he knows that half of the market will be sold out in five months. This rate does not take into account additional homes that enter the market. The absorption rate can also be a signal to developers to start building new homes.

    Testimonials

    Natsuki Tani was an outstanding buyer’s agent; the best I have ever worked with! From the moment I contacted Amanda Howard Real Estate and received my first phone call from Natsuki, she put me at ease with the buying process. She is so knowledgeable, always answered my questions thoroughly and provided great advice and guidance throughout the process. I was shopping for homes in Madison, Alabama while still living in Texas and …
    Debbie B.

    Categories

    Contact Us Now

    Any questions, comments, or feedback