2021 Bozeman Absorption Rate ⇑ Through The Roof
How To Calculate Absorption Rate – 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.
|AREA||TIME FRAME||NUMBER HOMES SOLD||NUMBER HOMES FOR SALE|
|All Bozeman||March 2021||66||59|
One type of Absorption Rate is calculated in “percentage of all homes” sold each month.
(You can use any time period, as long as you adjust the number of homes sold to coincide with that period.)
Absorption Rate, Chance of Selling: Sold Homes/Available Homes For Sale = 66/59 = 112% chance of your Bozeman home selling in one month. (Therefore, it could take less than a month to sell!)
A rate above ~18-20% indicates a seller’s market and below ~15-17%, a buyer’s market. Bozeman’s AR percentage comes in significantly higher than 18-20%!
A second type of Absorption Rate calculation results in “number of months to sell.”
Absorption Rate, Months To Sell: Homes For Sale/Sold Homes = 59/66 = .89 months to sell a home in Bozeman in March 2021.
Generally, Average Days on Market decreases as the Absorption Rate increases.