What is Absorption Rate?
The number of weeks it takes to sell current inventory at present rate of sales. Absorption rate 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) 691
- The number of sold properties for the previous month. 116
Number that sold last month, 116 X 12 (months in a year) =1392 divided by 52 (weeks in a year) =27.
then divide by number of listings 691 to arrive at Absorption Rate of 25 Weeks
This Month’s Absorption Rate is: 25 Weeks, **after I double checked the numbers… * 691 was same number as last month* * Go figure!