Seller's Market |
Balanced Market |
Buyer's Market |
---|---|---|
< 5 months Inventory |
5 months Inventory |
> 5 months Inventory |
The absorption rate is the rate at which a home is likely to sell in a particular market. These ratings are in a constant state of fluctuation, based on supply and demand, and usually involve all homes sold within the previous six-month period. A lower absorption rate means that the property will likely take a bit longer to sell, and conversely, a higher number indicates that the property is likely to sell much faster. Both buyers and sellers can use this data to help predict sales activity and home prices for the property in question. For example, if a homeowner lives in a market with 5 months of inventory in their price range, and they are anxious to sell due to a job transfer, then it might be in his or her best interest to be more aggressive in the listing price.
How is Absorption Rate calculated? How is Months of Inventory calculated?
50% of available homes are currently under contract
List Price | Available | Sold Since 5/1/24 | Under Contract Last 30 days |
Absorption Rate | Months of Inventory |
---|---|---|---|---|---|
401k-425k | 1 | 1 | 0.2 | 0 | |
451k-475k | 1 | 0.2 | 0 | ||
476k-500k | 1 | 0 | |||