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10 lots per year is the annual absorption rate indicated by the patricia gardens subdivision.
[tex]\frac{40}{4} = 10[/tex]
Absorption rate
A term commonly used in real estate, is the rate at which homes sell in an area over a time period. An absorption rate greater than 20% is associated with a seller's market while an absorption rate below 15% is associated with a buyer's market.
Annual Absorption :
Absorption is the amount of space or units occupied within a market over a given period of time, typically one year. Absorption considers both construction of new space and removal of existing space and/or units.
How do to calculate absorption rate?
The formula for absorption rate is simple. You divide the number of homes sold in a time frame by the homes available.
An Example Of Absorption Rate
Total homes sold in past 30 days: 10.
Total amount of homes on the market: 45.
[tex]\frac{10}{45}[/tex] = 0.22 or 22% absorption rate.
Learn more about absorption rate :
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