What exactly is an absorption rate? Apparently, other industries have used this metric for decades but real estate is just catching up. It's a good tool to understand home market inventory and the rate of sale.
Briefly, absorption rates mean the rate at which a market absorbs or uses up inventory. It assumes that no new inventory comes on or leaves the market, so it's like a snapshot of what is happening today.
So for today, the last day of May 2016, here is what the absorption rate is for zip codes 60093 (Winnetka & Northfield), Wilmette 60091, Kenilworth 60043, and Glencoe 60022 for the past 12 months.
The current absorption rates are:
Winnetka/Northfield: 11.1 months
Wilmette: 5.3 months
Kenilworth: 19.4 months
Glencoe: 9.5 months
To further explain this, here is the chart we use to determine exactly what kind of market we're having. Is it a buyer's market with a lot of inventory and falling prices, a seller's market with tight inventory and rising prices, or a neutral market?
These absorption rates can be further broken down into sub-sets such as certain price ranges, different numbers of bedrooms, or location.
If you are considering selling your home and would like more information on absorption rates, please give me a call! 847-977-6024
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