Why Are Absorption Rates so Important?

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Today’s topic is all about the absorption rate in Rochester. Although this sounds like a rather technical term, it actually has a significant impact on your home’s value.

In fact, nothing impacts the value of your home or the real estate market nearly as much as the absorption rate. For instance, it determines whether inventory favors buyers or sellers. As agents, we need to understand what they are. If you interview a potential agent for hire, you must ask them about what the absorption rates are not only in your city, but for your neighborhood and type of property.

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The absorption rate has a significant impact on your home’s value.

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Absorption rates are calculated by current inventory levels and the amount of monthly sales for prospective properties in specific areas. Oftentimes, we categorize properties into different price ranges. We see a direct relationship on the average days on the market and list-to-sales ratio with absorption rates as well. Typically, the lower the inventory, the more it favors sellers. Vice versa, higher inventory favors buyers.

It’s important to examine recent data when determining home value. Otherwise, you’ll be comparing outdated numbers to your property and missing out on an accurate estimate.

If you’re thinking about buying or selling a Rochester home, give me a call or send me an email! I’d be happy to talk about absorption rates or anything else real estate with you.