2. ABSORPTION
RATE
First, determine the number of homes closed in your market over
a specific period — say, 12 months.You can get this data from the
MLS.
Next, divide the number of homes by the number of months in the
period — in this case, 12.This calculation gives a per month
absorption rate.
Last, divide the rate into the number of current listings.This yields
the months’ supply of homes.
3. ODDSOF
SELLING
How to calculate the odds of selling any one home. “Even in a hot
market, it’s rare for more than 50 percent of homes to sell,” he
said.To make this calculation:
Search the MLS to determine how many transactions have closed
in the last six months.
Divide that number by the number of new listing that came onto
the market during the same six months. (Don’t include listings
that expired and then were relisted.)
This equation gives you the percentage of homes entering the
market that actually sold. For example, if 100 homes sold and 200
were listed, the odds of selling are 50 percent.
