When it comes to understanding what is really happening in today’s real estate market, the more detailed the information the better the analysis.

The Absorption Rate is a tool that provides insight into inventory levels. It compares the number of active listings with actual sales over a given period of time. The result is an illustration of which price categories of homes are currently selling, and which are facing more difficult market conditions.

The interactive chart below is for Portland as of September 30th.

Click on any bar for specific details. You can view information in aggregate, or reduce your choices to Single Family, Condos or Multi-Family homes.

What Does It Mean?

When calculating the Absorption Rate, 12 months of sold history is included and the rate itself is measured as Active + Pending ÷ Sold = Months of Inventory.

As a general guide, 6 months of inventory supply (or less) normally provides an advantage to the seller. An inventory supply of 6 months or more is the opposite – an advantage for the buyer.

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About the Author: Michael

Michael, along with his wife Laura, is co-owner of Maine Home Connection, an independent real estate company located in Portland. Maine. Together they started the brokerage from scratch with a new vision of what a company could look like if it focused completely on the needs of our clients and our agents.

Understanding the Local Market

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