For those of you in which the concept of absorption is new, don’t worry, it’s pretty simple. Absorption measures the rate at which condos are sold over a certain period of time. For instance, the data below represents the number of condos that were sold last month. So you’re asking yourself, “Why is it important?” The absorption rate is a strong indicator of how well a market is doing. If a market has a low absorption rate, this generally means that condos are not selling in a particular area. In turn, this would drive down prices since the market would be saturated with inventory. I have included an analysis of the Seattle absorption rate.
* Information courtesy of FatReport.com
