Don't Get Upset With Data: Absorption Rates

Absorption Rates is a word real estate agents like to toss around, but what does it really mean?

Absorption Rate= The number of weeks it would take to sell the current inventory at the present rate of sells.

This is not an exact science, but something real estate professionals use to see a trend. What we would like to see in the next months is a decrease in absorptions rates. Kuna is only selling about 1/4 of what is for sale. With an decrease in the absorption rate, it would reveal an increase in sales or an decrease in inventory.

This chart shows just some of the subdivisions in Kuna and gives an idea of the competition in that market. As you can see, the homes in the lower price ranges are selling easier, and the subdivisions with the most inventory have more choices for that buyer to look at.

Absorption rates can be used with different data, like just houses in a certain price range. It gives you a idea how you should be pricing your home to get it sold. If you had a home worth $350,000–$400,000 and the absorption rate was 24 months, then you know you would need to price your home in the lower 50% price range to get it sold in 12 months. If you needed to sell in 6 months, you would need to price it in the lower 25% price range. It is just another tool, another piece of the puzzle professional real estate agents use to help price your home correctly.

Actually, the Kuna market is not doing too bad, in comparison with the rest of Ada county.