If you’ve ever heard someone in real estate talk about absorption rates and wondered what those are, you're definitely not alone. It's not the most commonly thrown around term, nor did it make it to my commonly thrown around terms article. That being said, this key metric is one of the best ways to understand the market, whether you’re buying, selling, or investing.
What Is an Absorption Rate?
Absorption rate measures how quickly homes are selling in a specific market. It’s calculated by dividing the number of homes sold in a month by the total number of homes available.
- 0-4 months of inventory: Seller’s market (high demand, low supply).
- 4-6 months of inventory: Balanced market.
- 6+ months of inventory: Buyer’s market (low demand, high supply).
Why Absorption Rates Matter
- For Buyers: It helps you understand how competitive the market is and how much negotiating power you have.
- For Sellers: It helps you price your home appropriately based on market conditions.
Current Absorption Rates in Boston (January 2025)
As of last month, Boston’s absorption rate is approximately 3.8 months. This indicates a market slightly favoring sellers but trending toward balance.
How Can You Track Absorption Rates?
Keeping an eye on market trends like absorption rates gives you an edge in your transaction. As your real estate advisor, I provide regular market updates tailored to your goals.
Want to stay informed about the latest market trends? Let’s connect today and tailor a strategy to your needs! Access key resources from Danielle Dimond Real Estate, and get in touch using this link.