Absorption rate?  Isnt it about pricing a home to sell in the current market?  Keep in mind that your "absorption rate" takes into acount all of the homes that are over priced and will not sell unless they lower the price.  Price the home for the morket and it will sell.  Forget the "absorption rate".

John, I am SO sorry.  My computer did not indicate that my first response went through, or that ANY went through.  I checked to make sure and it sent it multiple times.  Never happened before, maybe it's time for a new computer.  Nadine Blakely

Nadine - no problem, but just for the record the absorption rate is not an exact science but... it is a means in which you can calculate inventory terms.  All of the rules of pricing still apply but these numbers and this particular "rate" is yet another interesting statistic to pass on to our clients.  Why?  So they they can be completely informed. 

Take sales price to list price ratios for example.  Those numbers are not the true story.  You would have to do a property history report and calcuate the original price vs. sales price for those numbers to give you an idea of what kind of percentages and differences truly apply.  List price to sales price ratios are only from the last list price and do not calculate the original list price. 

Now are list price to sales price ratios the whole story.  No but that along with the absorption rate and CMA and price ranges, and more tell a greater picture for our buyers and sellers to understand.  We have to show them the the big picture and sometimes that includes letting them add up all of the small pictures to determine where the market is and how to appropriately respond to it.