What is the absorption rate for Back Bay condos? Before I answer that question, let me first explain what the term absorption rate means in real estate.

Much like a weathervane that measures the direction and intensity of the wind, the absorption rate in real estate is one method to measure  the direction/ intensity of the Boston real estate market.

There are several formulas that I have seen to calculate the absorption, but I’m going with the simplest one.

Back Bay Condo Absorption Rate

Number of Back Bay condos available: 215

Number of Back Bay condo sales last month (July): 48

215/48 = 4.47  (4.5 months)

Translation: At the current rate of Back Bay condo sales and assuming no more condos come on the market, it will take approximately 4.5 months to sell off the existing Back Bay condo inventory. Is that good or bad? Well it would depend it you’re a seller or buyer.

The rule of thumb, according to the Realtor Association:

1-5 months – Sellers market

6 months – Neutral

Greater than 7 months – Buyers market.

File Under: Back Bay Bradley will enjoy reading this blog post.

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