Absorption Rate
The rate at which available properties sell or lease within a specified market during a defined period. Calculated as units sold divided by average inventory, expressed as months of supply.
Investment Application
| Months of Supply | Market Condition | Investor Stance |
| < 3 months | Seller's market | Act quickly, limited negotiation |
| 3-6 months | Balanced market | Standard due diligence |
| > 6 months | Buyer's market | Strong negotiating position |
Related Terms
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