What is Absorption Rate Pricing?

What is Absorption Rate Pricing?

Absorption rate pricing isn’t new but often an over-looked method used by real estate professionals to calculate the value of a home and the market conditions. The calculations are based upon the principles of supply and demand.

Only a certain number of homes will sell in any given period. For example, if 24 homes sold in the last 12 months that means the market absorbs 2 homes per month on average. So if there are 12 homes currently listed for sale there is a 6 month supply.

  • A 6 month supply is considered a stable or balanced market.
  • Less than a 6 month supply is considered a sellers market.
  • More than a 6 month supply is considered a buyers market.

To calculate absorption rate Realtors and Appraisers will do the following:

  1. Search for homes that sold in the last 3, 6. and 12 month period that are similar to yours. Similar in location, condition, size, features, amenities, and price. From these numbers, the average sales per month will be calculated.
  2. They will then search for all active listings. Once again for homes similar to your home.
  3.  The monthly supply of homes on the market will then be calculated producing the average number of home sales per month.
  4.  This will give a rough estimate of how long it could take to sell your home.

Leave a Comment

Your email address will not be published.


Michelle Gibson Wellington Florida REALTORMichelle Gibson of the Hansen Real Estate Group Inc is a full-time REALTOR who has been specializing in Wellington Florida real estate since 2001. This veteran of the real estate industry has expertise in technology, marketing, and social media.


Hansen Real Estate Group Inc. is a full-service real estate brokerage specializing in residential real estate. As a customer-focused, quality organization, we achieve success one client at a time. Call 561-333-0446 or e-mail me today at [email protected]

Michelle Gibson and Hansen Real Estate Group Inc fully support the principles of the Fair Housing Act and the Equal Opportunity Act. Accessibility Statement


If you are thinking about buying, selling, or renting your home, townhome, condo, or other Real Estate in the following areas; Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, Greenacres, Loxahatchee, Royal Palm Beach, Lake Clarke Shores, West Palm Beach, Palm Beach Gardens, or Jupiter there are thousands of Realtors to choose from.

However, it doesn't cost you any more to work with a top Realtor in Wellington Florida. I would welcome the opportunity to show you how I get outstanding real estate results for all of my clients. If you are looking for a top real estate agent in Palm Beach County Florida who will make a difference you have come to the right place.

Use this real estate website to learn more about moving to Wellington Florida, living in Wellington Florida view homes for sale, homes for rent along with real estate market reports for the most popular communities that Wellington Florida has to offer.

© 2022 · Wellington Florida Homes for Sale and Real Estate · All Rights Reserved by the WellingtonHomeTeam.com

Scroll to Top