Top Seller Tuesday: Absorption Rate - Questions and Answers for the Maryland Real Estate Market
Q: What is an Absorption Rate?
A: The absorption rate for a market is a statistic that tells, based on the recent sales volume, how long it would take to sell the current inventory of homes in a given area. The statistic is usually provided in weeks or months.
Q: So, will this number tell me how long it will take to sell my home?
A: No. But it can give you an idea of how much competition you are facing, and how ‘hot' your market is. Or is not. Here in the Greater Baltimore area, an Absorption Rate of about 22 - 26 weeks is considered to reflect a stable market. Absorption rates of less than 22 weeks would suggest a Seller's market, and Absorption Rates of more than 26 weeks would Suggest a Buyer's Market. It's also important to note how the Absorption Rate varies over time.
Q: So why do I care?
A: If you're selling your home, the Absorption Rate is a very valuable statistic. It is one statistic that many Realtors don't talk about in their listing presentation. Depending on your goals, and on what's most important to you, this statistic can help you plan the marketing strategy for your home.
Each week for Top Seller Tuesday I will be posting the current Absorption Rate for a particular zip code. The Absorption Rate in your zip code, or even just in your neighborhood could be very different. It can vary by price point within a neighborhood or zip code (for example, the Absorption Rate of $350,000 homes in 21042 could be vastly different from the Absorption Rate of $800,000 homes in 21042).
If you'd like the Absorption Rate for a particular market and/or price range, please feel free to contact me.
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