What is in the property, what is the absorption speed?

In real estate, the rate of absorption is a scale of supply that calculates the rate at which the supply of real estate is sold on a particular market. It is basically a method of calculating the time that can be sold for units currently on the market. The absorption rate can be used as a tool that helps buyers and sellers to better understand the real estate market. Although in some cases it is effective, this approach does not indicate approximately how many other properties are for sale at the same time. The absorption rate offers a way to find out what is happening on the market and helps the seller to understand what they are against.

The absorption rate can also provide the buyer with the opportunity to negotiate lower prices on the inventory they can have on the market. Based on the theory of supply and demand Basic Economics, if demand is consistent, increased supply usually leads to lower prices to restore market balance. Similarly, if the offer is limited, the buyer usually pays more for obtaining items for sale.

For the most part, absorption depends on the sale of real estate in a particular area and how well it compares to the demand with the demand in this place. Developers often look at the overall demand for new homes and how they get their properties compared to the context offer. This allows them to determine the degree of absorption and ultimately their ability to sell a new property in this area.

Here is an example of the absorption formula: let's say that the area sells an average of 1,000 new houses per year and the development company gains 2% of the market there. In this scenario, their degree of absorption would be 20 features a year. At this point, there are only two ways that the rate may change - from a change in the number of houses sold or due to a sudden shift in the competitiveness of the property against local stocks.

The

absorption rate may prove to be a viable method for analyzing market trends over time. JThis is because, like other industries, the real estate market is primarily a supply and demand. Some consider the rate of absorption to be just a guide. Others, however, consider this to be a valuable tool that can help buyers and sellers to obtain a clear market vision and thus make a more informed decision on assets.