Let me try again to calculate the absorption rate, this time with the Boston W Residences. Remember the absorption rate is NOT an exact science. Figuring it is based on the premise that one will be looking for a trend. This is how I calculated the absorption rate for The Boston W Residences:
- How many listings are currently on the market? In this instance I included both active and pending luxury condos. I came up with 91
- How many listings sold last month? I came up with 4.
Now that we know those numbers, we will need to:
- Add together the number of Active/Pending listings which equals 91.
- # of Sold Last Month 4 x 12 (months in a year) divided by 52 weeks = 0.92
- # of Active divided by the number of sold 91/0.92= 98.9 weeks
Absorption Rate = 24.72 months.
