February 14th, 2023

Bozeman Absorption Rates

Photo Bozeman Absorption Rate Taunya Fagan Bozeman Real Estate

Bozeman Absorption Rate ⇓ in 2023

How To Calculate Absorption Rate (AR) – What’s Bozeman’s Absorption Rate?

Absorption Rate (AR) indicates how long it takes a Bozeman home (or any property) to sell in a particular area and in a specific time period.

EXAMPLE CALCULATIONS BELOW:

AREATIME FRAMENUMBER HOMES SOLDNUMBER HOMES FOR SALE
All BozemanFeb 202339158

One type of Absorption Rate is calculated in “percentage of all homes” sold each month.

Photo Number Bozeman homes for sale inside and outside city.
Number Bozeman homes for sale inside and outside city.

This form of Absorption Rate is calculated by dividing the number of active homes for sale in a given month by the number of homes sold in a given month.

(You can use any time period, as long as you adjust the number of homes sold to coincide with that period.)

Absorption Rate as Chance of Selling:

Sold Homes/Available Homes For Sale = 39/158 = 24.7% chance of your Bozeman home selling in one month. (Therefore, it could take about 4 months to sell.)

A rate above ~18-20% indicates a seller’s market and below ~15-17%, a buyer’s market.

Number of Bozeman homes sold inside and outside city.
Number of Bozeman homes sold inside and outside city.

Bozeman, Montana’s AR percentage comes in higher than 18-20%, so we are still in a buyer’s market, but just barely.

A second type of Absorption Rate calculation results in “number of months to sell.”

Absorption Rate as Months To Sell:

Homes For Sale/Sold Homes = 158/39 = 4.05 months to sell a home in Bozeman in early 2023.

Generally, Average Days on Market decreases as the Absorption Rate increases.

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