Absorption rates are very handy in determining how a certain market is doing and giving an idea how long an average house will take to sell. Absorption rates are determined by a simple formula of the number of homes for sale on the market divided by the number of homes sold in a month, week etc. For example a monthly absorption rate in a market with 100 homes for sale, that sold 10 homes over the last month would yield a 10 month absorption rate or it would take 10 months to sell all of the inventory of houses on the m
arket.
When pricing a home to sell with the above scenerio, if you wanted to sell a home within 5 months you would need to be priced in the lower 50% price range of homes, if you wanted to sell in 2.5 months you would need to be priced in the bottom 25% of the homes for sale.
Another indicator given by an absorption rate is what kind of market we are in. Absorption rates that yield 7 months or above are typically defined as a buyers market, where 1 to 4 months are considered a sellers market and 5 or 6 months is considered a balanced market.
If you would like a free absorption rate for your Colorado Springs neighborhood, please contact Patricia.
To find out more about Colorado Springs Realty and the Colorado Springs Area contact me or visit my website.
This entry was posted on Monday, August 18th, 2008 at 7:41 pm and is filed under Colorado Springs Homes. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
