What is Absorption Rate?
The number of weeks it takes to sell current inventory at present rate of sales is the absorption rate and is used as a way to track the “trend” of the market.
The figures used here are per Big Bear Multiple Listing Service.
What information from the MLS is needed for this Big Bear real estate market snapshot?
- Number of listings (residential) all that are listed as Active, Contingent, Pending (in escrow) & Back-Up status (a contract on the property with a contingency) 601
- The number of sold properties for the previous month. 123
Number that sold last month, 123 X 12 (months in a year) =1476 divided by 52 (weeks in a year) =28.
then divide by number of listings, 601 to arrive at Absorption Rate of 21 WeeksThis Month’s Absorption Rate is: 21 Weeks