The Town Broker

Real Estate Statistics: What You Need To Understand. (Part 1)

Real estate statistics can be confusing. I once had a college professor who said that there were three kinds of lies: lies, damned lies, and statistics. (Actually, I think he stole this quote from Mark Twain. But the concept stuck with me, so I’ll give him credit.)  The phrase describes the idea that numbers can be used very persuasively in supporting an argument (especially a weak one). It also points out that people are often quick to disparage statistics that don’t support their point of view. 

Know The Key Real Estate Statistics To Achieve Success

Real estate is FULL of statistics! In this 3-part series, I’ll take a deeper look at the ones that I believe convey the most important information about any housing market: 1) market absorption, 2) days on market (DOM), and 3) sale price to original list price ratio.

Market Absorption

The market absorption rate is a statistic that describes the “dynamics” of the current market. If we can agree that all markets seek to find a balance between supply and demand, then the absorption rate tells us just how well it’s doing. The number is found by dividing the total number of available listings (those that are fully available to be shown and purchased) by the number of listings that have gone under contract in the past month. The answer to this simple math problem tells you just how many months it would take for Read the rest of this entry »

Tags: absorption rate, market absorption, real estate statistics