This Absorption Rate tool is one of the coolest and most important you can use to help you determine the micro trends in our Lake Norman housing market, even by neighborhood!
Simply put, the Absorption Rate is a basic mathematical formula used to determine how many months it will take to sell the current number of active listings based upon the present rate of sales.
Economists say that a balanced housing market should have 6-8 months of supply of active listings. An absorption rate higher than 8 months would indicate a buyers’ market. An absorption rate lower than 6 months would indicate a sellers’ market.
To calculate the absorption rate:
Take the number of homes currently on the market and divide by the most recent 30-day number of sales.
Our active listings in Lake Norman are 1150. We sold 65 homes this month so:
1150 divided by 65 = 17.7 months of supply
Clearly in this example we are in a very strong buyers’ market.
To use this Absorption Rate tool simply fill in the neighborhood or area and it will do the rest!
Please feel free to email me with questions: firstname.lastname@example.org