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What is Absorption Rate you ask?

03/10/23  |  Maria Cunneen

Market data that affects Real Estate

Understanding Market Data & Absorption Rates

The absorption rate is an important factor for both purchasers and sellers as it indicates how long it would take to sell current inventory that is on the market based on historical sales.
As noted above, the absorption rate can tell you if the market is a seller’s or buyer’s market.
  • In a seller’s market, there is little inventory available on the market and therefore sellers have more pricing power (therefore, a higher price on properties).
In a buyer’s market, there is a lot of inventory available on the market and therefore buyers have more pricing power (therefore, a lower price on properties). Read here for full article.
 
 
Courtesy of CFI Education

Understanding Market Data & Absorption Rates

The absorption rate is an important factor for both purchasers and sellers as it indicates how long it would take to sell current inventory that is on the market based on historical sales.
As noted above, the absorption rate can tell you if the market is a seller’s or buyer’s market.
  • In a seller’s market, there is little inventory available on the market and therefore sellers have more pricing power (therefore, a higher price on properties).
In a buyer’s market, there is a lot of inventory available on the market and therefore buyers have more pricing power (therefore, a lower price on properties). Read here for full article.
 
 
Courtesy of CFI Education

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