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Absorption Rates

By
Real Estate Agent with Pierce Group Realty LLC

I am wondering when you use absorption rates, do you use 6 months or 12 months?  And do you figure it for just the past month?  Appreciate any input.  Thanks

Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Brenda,

12 months. It's always the prior 12 month period of time. I also try to explain the presumption is that sales will continue at the same pace for that specific 30 days window as they did the prior 12 months.

Our board provides us a really great analysis of data that makes it very convenient for us.

Mar 20, 2009 11:20 AM
Elizabeth Bolton
RE/MAX Destiny Real Estate Cambridge, MA - Cambridge, MA
Cambridge MA Realtor

Hi Brenda,

My company provides the absorption rate charts for us. And as others have said it's always calculated using a year's data.  Not sure about doing it for any other length of time though I can't imagine using one month's info - in my area at least it wouldn't begin to be enough data. 

Liz

Mar 20, 2009 04:53 PM
Anonymous
Brenda Pierce

Thank you.  I agree that the 12 month data is much more accurate giving a true picture of the market overall, so that is what I will be usiing.

Mar 20, 2009 06:33 PM
#4
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

This is an interesting subject.  I need to take a look at our board and see what they provide for us...

Mar 20, 2009 10:08 PM