Boise Real Estate: 101 – Absorption Rate
An absorption rate is the number of homes sold (absorbed by the market) over a given period of time.
Absorption rate is calculated by dividing the number of months you want to analyze into the number of closed sales.
Here’s a current example that calulates the absorption rate for homes in Eagle above $500,000 over the first six months of 2010:
During the first six months of 2010, 29 Eagle homes priced above $500,000 closed escrow.
In this example, the absorption rate works out to about 5 closed sales per month.
(see my next post for an explanation of “Months’ Supply”)
July 15th, 2010 Posted in Inside Real Estate
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