The formula to calculate Absorption Rate (AR) is:
\[ AR = \frac{HS}{HA} \]
Where:
Absorption rate is a measure of how quickly homes are sold in a specific real estate market during a given time period. It is calculated by dividing the number of homes sold by the number of homes available. This metric is commonly used by real estate professionals to assess market conditions and determine the demand for housing.
Let's consider an example:
Using the formula to calculate the Absorption Rate:
\[ AR = \frac{50}{200} = 0.25 \]
This demonstrates that with 50 homes sold and 200 homes available, the absorption rate would be 0.25, or 25%.
