Posted on January 11, 2010
The "Rate of Absorption" measures the inverse of "Months of Inventory" and represents how much of the current active listings (as a percentage) are being absorbed (or sold) each month. For instance, if there are 1,000 active listings and 100 of them sold in a given month, the rate of absorption would be 10%. 10% of the market is being sold in that given month.
The great news is that the December rate is almost double that of a year ago. Lower prices, lower interest rates, and tax incentives have all had a very positive effect on our local real estate market.