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MARKET ACTIVITY
PRICING TRENDS
PRICING RATIOS
DAYS ON THE MARKET
PRICE PER SQUARE FOOT
SUPPLY AND DEMAND
Interpreting Supply and Demand Numbers in Real Estate
Real estate agents, brokers and other players in the housing industry use months of inventory and absorption rate to make a variety of decisions when it comes to buying and selling real estate.
Months of supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace (absorption rate). A low number of months availabe indicates a sellers market where a high number of months of inventory indicates a buyers market. Typically months of inventory 0-3 months indicates homes are moving quickly and the market is a sellers market; 3-6 months indicates a normalized market; 6 months and greater indicates homes are moving slowly and the market is a buyers market.
Absorption rate is the rate at which available homes on the market are sold. As an industry rule of thumb, anything over 20 percent is thought of as a good absorption rate in real estate. A high absorption rate (20% or greater) indicates homes are moving quickly and prices are up, meaning it's a good time to sell. A low absorption rate (15% or less) indicates homes are moving slowly and prices are down meaning it's a good time to buy. For example: absoprtion rate 0.68 x 100 = 68%. This would indicate a very strong sellers market.
Real estate agents, brokers and other players in the housing industry use months of inventory and absorption rate to make a variety of decisions when it comes to buying and selling real estate.
Months of supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace (absorption rate). A low number of months availabe indicates a sellers market where a high number of months of inventory indicates a buyers market. Typically months of inventory 0-3 months indicates homes are moving quickly and the market is a sellers market; 3-6 months indicates a normalized market; 6 months and greater indicates homes are moving slowly and the market is a buyers market.
Absorption rate is the rate at which available homes on the market are sold. As an industry rule of thumb, anything over 20 percent is thought of as a good absorption rate in real estate. A high absorption rate (20% or greater) indicates homes are moving quickly and prices are up, meaning it's a good time to sell. A low absorption rate (15% or less) indicates homes are moving slowly and prices are down meaning it's a good time to buy. For example: absoprtion rate 0.68 x 100 = 68%. This would indicate a very strong sellers market.
