Absorption rate is NOT an exact science. Figuring it is based on
the premise that one will be looking for a TREND. It is advised to
consistently do the numbers each month, to be able to track a trend.
You need to know 2 figures.
1) How many listings are currently on the market?
2) How many listings sold last month?
You will be counting under-contract or pendings as listings, since they are not SOLD yet.
Multiple the number of solds last month by 12 (months).
Divided by the current listings equals # of Units that would sell each week.
Divide the # or units that should sell each week into the number available = absorption rate.
The Definition of Absorption Rate:
Number of weeks it takes to sell the current inventory at the present rate of sales.