Absorption Rate - What Homeowners Need To Know

A key ingredient in determining the value of a home in the Tallahassee real estate market, or any real estate market for that matter, is understanding absorption rate and how it is measured. We define an absorption rate as an estimate of the rate at which homes will be sold each year. This is a critical piece of information that is needed to understand how the inventory of available housing effects the sale of a particular home type in the Tallahassee real estate market. The "math" behind determining the absorption rate of homes in any particular market is relatively easy. We calculate absorption rate as the average number of homes selling each month and use this to determine the amount of supply currently on the market. We measure months of supply as [The Number of Homes Currently on the market] ÷ [The Average Number of Homes Sold each month in the past 12 Months] Taking a look at the residential absorption rate in the Tallahassee real estate market (all counties surrounding Tallahassee), we find that there are 4,799 residential units on the market (single family detached homes, condominiums, and townhouses) with twelve months sales total 3,903 homes means that the residential absorption rate is roughly 325 homes per month. We can use this information to determine the "Months of Supply" of homes in the Tallahassee real estate market.

*4,799 homes currently on the market 3,903 homes sold in the past 12 months 325 homes on average sold each month 4,799 ÷ 325 = 14.8 Months Supply of homes in inventory. If you would like more information on how inventory levels are moving in the Tallahassee real estate market, check out our Leon County Real Estate Market Report on the Tallahassee Real Estate Web Site ! It is updated several times per week and shows what inventories are doing currently.

*Joe Manausa Real Estate is a brokerage company headquartered in Tallahassee, Florida. Its unique business model provides specialists to both home sellers and home buyers, and the results speak for themselves. JMRE has significantly more 5-star reviews on google than any other local competitor. Joe Manausa Real Estate is a leader in internet marketing and utilizes search engine optimization, email marketing, social media and data analytics to get their clients’ home sold faster and for more money than any other Tallahassee brokerage firm. For more information, visit www.manausa.com or call us at (850) 366-8917.

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