Determining how porous your real estate market is has nothing to do with whether you’ve had any rain lately.  But, determining the Absorption Rate in your market area can help you set home prices and manage client expectations.

Imagine. . .

Your new listing prospect asks you how long you think it will take to sell their home.  You pull out the Absorption Rate analysis you prepared before the listing presentation and you give them an estimate based on current trends in your market.  Sounds like fun, doesn’t it?  Sounds like you’ve got a competitive edge over your competitors if they’re still giving the old, “It depends” answer.

Calculating an Absorption Rate is Easy

If you’re not familiar with using this tool, you’ll be glad to know that it is a very easy way to track trends in your market.  A presentation was given at the recent NAR conference, and this brief summary explains how to calculate an Absorption Rate

You can also use it to help set pricing, based on the number of units that are on the market and how long it should take to sell them.  Some of my clients provide monthly Absorption Rate figures to their clients each month.  The same type of information can be calculated for a neighborhood, or for a price range.

Sell It in English

If you’re going to sell the fact that you provide regular updates on market conditions, I suggest that you say it in English.  A bullet point on your “about” page listing monthly Absorption Rate updates as a benefit of your service probably won’t be meaningful to your clients.

Think about what that type of information adds to the process, and write a benefit statement that even non-real estate folks will understand!

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