Unclear on what the net absorption rate is? Or just curious to know more? Net absorption rate is the rate at which available homes are sold in a specific real estate market during a given time period. This is great for tracking the supply/demand in an area.
It’s best to use Flexmls or our monthly STAT report to pull the numbers you need for the calculation (Monthly Sales and Total Inventory). Note- the STAT report is all encompassing of the ARMLS market. If you wanted to look at a smaller market, you’ll need to proactively track inventory for that area to determine the average.
Calculate Net Absorption Rate
1. Find the total number of MLS sales in a given market for a specific period of time.
If we look at the STAT report for May 2017, we see that the number of sales that month was 9,641.
2. Find the total average inventory for residential properties in that area in that same period of time.
The number of average inventory for the same month was 23,520.
3. Divide the number of MLS sales by the average inventory.
To get the net absorption rate, we’ll divide 9,641 by 23,520 to get .40. This means that homes were sold at a rate of 40%.
