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Edmonton Absorption Rates

The best way to know if Edmonton or any city  is in a buyers market or a sellers market is to determine the current absorption rate.

 

An absorption rate is the rate at which homes sell in a given area during a given time period. Absorption rate is calculated by dividing the number of sales in a given month by the number of available homes for sale. It is the inverse of months of supply.

For example, if there are 20 properties listed for sale in a certain area, and 2 properties sold over the last month, the absorption rate is 10/100=10%. Which means, assuming no other homes put on the market, it would take 10 months for buyers to purchase enough properties to absorb the real estate demand.

As a rule of thumb, an absorption rate of 20-25% or higher means that homes are selling quickly and the market favors sellers. Lower absorption rates mean that homes are not selling quickly and supply is much greater than demand, favoring buyers.

 

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