Harford County, MD How can we tell the real estate market is improving? Absorption Rate.
How can we tell the real estate market is improving? One way is to look at the Absorption Rate.
The absorption rate is a measure of how a market area is consuming the homes available.
In other words ...
How many months will the homes, currently on the market, take to sell if no more new listings are added to the market? The answer is the absorption rate. The absorption rate is a calculation of the number of active homes on the market divided by the average number sold per month. The market area can be drilled down to a specific neighborhood or as broad as a state, it all depends on how you plan to use the information.
Here are a few examples:
Harford County currently has 1049 active homes for sale. The current sales rate is 170 homes per month. Harford Counties absorption rate is 6 months. In Bel Air, 21014 and 21015 the current sales rate is 51 homes per month and 258 active homes for sale giving Bel Air an absorption rate of 5 months. Greenbrier Hills, one of the most active subdivisions in Bel Air, has 12 active homes for sale and a sales rate of 5 homes per month and therefore a 2 month absorption rate.
It’s important to note, these numbers are fluid and may not be the same in 30 days or even 5 days for that matter. They are an excellent resource for a market snapshot and for market trends. Except for the purpose of trend reports, these numbers change with market activity in the same way comparable properties change and comparable market analysis expire.
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Harford County, MD How can we tell the real estate market is improving? Absorption Rate.
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