ABSORPTION RATE

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.

ODDS OF 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.