Absorption Rate

This term is used to describe the pace at which available homes are sold in a particular real estate market, at a particular point in time. The absorption rate formula: total number of available homes ÷ average number of sales per-month. The number you get tells you how many months must pass before all the homes on the market have changed hands. If you are an owner considering selling your home, a brisk absorption rate signals to you that this might be just the right time, as the number of homes for sale will probably be snapped up quickly. If you are a developer, a healthy absorption rate tells you that this might be a good time to build.