I don’t recall if this was taught to me when I joined my first Real Estate Brokerage, or in the Appraiser course I attended, but it is a very useful tool to estimate the time it will take to sell a particular home. 

Today I looked at the city I last called home, Lighthouse Point, Fl., and I’ll use the numbers I found to help explain this concept. 

In the past year, approx. 152, or roughly 12.5 per month, single family homes sold in Lighthouse Point. There are now 96 homes listed for sale. Therefore, if the current rate remains steady at 12.5 homes/month, then it will take nearly 8 months to clear the current inventory. 

During Covid, we probably had a month of supply, if that. But a selling time of 45 days is a pretty balanced market. 

Obviously market conditions are always changing and events in the Country or even the World can cause changes, but the market doesn’t usually stop or change on a dime. 

And remember, the market always has 2 options; up or down. Pricing too high will cause a lengthy selling time and the risk of negative changes to the market. 

A seller should ALWAYS ask, during the interview process, the Absorption Rate in their market. Knowing, understanding and pricing with respect to the Absorption Rate will usually result in a reasonably quick sale and a good selling experience.