Hello Everyone,
Have you ever talked to a real estate broker or sales person and ever felt lost when they talked in their jargon? You hear terms like LTV and PITI, or CDD and while you may have heard the acronym, you do not know what it really means. In addition to the acronyms, the same can be said for the absorption rate so we wanted to take a moment and break it down for you. So first off, what does the absorption rate do? For those in the industry, it is a barometer to figure out how long it will take to sell the current inventory in a specific market.
For example, if we wanted to figure out the probability of single family homes in Marco Island selling, lets take a look at the past 6 months. There were 160 closed sales and 349 properties entered. If we divide 160/349 we figure there is a 46% probability of a sale of single family homes in Marco Island.
For condos, the numbers are very similar. Over the last six months there were 189 sales and 412 new entries which also comes out to 46%.
For lots, there were 59 sales and 161 entries for a probability of 37%.
Do you want more information about the absorption rates and probability of selling in Marco Island? Contact us today!
