What the Absorption Rate Says About Your Local Real Estate Market
Continuing education is essential in the real estate industry. Staying informed about market trends and the local economy allows me to provide knowledgeable, professional guidance to my clients.
Given today's real estate market and economic conditions, I am currently expanding my education in short sales, foreclosures, and real estate owned (REO) properties.
One metric that banks often use when evaluating short sales is the absorption rate, which is also a valuable tool for anyone who wants to better understand their local housing market.
The absorption rate is calculated by dividing the total number of available properties by the total number of properties sold during the previous month. The resulting number represents the estimated number of months it would take to sell the entire current inventory, assuming market conditions remain relatively the same.
This simple calculation provides insight into the balance between supply and demand and can help indicate whether a market favors buyers or sellers.
Realtor | SRES® | Certified Transaction Coordinator
DRE# 01332306
Jason Mitchell Group
đź“ž 619-820-9999
Resource: National Association of Realtors®
SFR®: Short Sales and Foreclosures Resource
