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Market absorption rate template

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Wayne Henry

Thread Starter
Junior Member
Joined
Nov 17, 2003
Professional Status
Certified Residential Appraiser
State
Maryland
The following is my a market absorption rate template I add to my reports. This helps me determine if the market is appreciating, stable or declining. I hope this helps anyone out there needing help on how to figure this out.

Market Absorption Rate

Definition:

INVENTORY - The total number of homes for sale within a defined market segment.

ABSORPTION RATE - The rate at which homes will sell within a given period of time; Unit sales per month.

MONTHS OF INVENTORY - Time required too sell all existing homes.

The subject properties market had XXXX home sales in a XXXX month time period, divided by XXXX months = XXXX home sales per month

The current subject market inventory has XXXX home sales divided by XXXX sales per month = XXXX months of real estate inventory in the subject market area.

An investors pricing strategy would be to price the subject property lower within the defined market segment to allow the subject to sell first.
 
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