The absorption rate – abs rate – is a measure of inventory. How long will it take to “absorb” the current inventory? Below is a chart that displays as a function of comparing the closed and active listings the abs rates of the top 10 subareas by volume of sales over the last 30 days.

Here’s how to read this; BLR is the top selling subarea in the last 30 days with 36 sales or so. The subarea has only 12 active listings, though, so all things remaining equal, they will burn through those homes in 1/3 the time that’s elapsed…about 10 days. So BLR has 10 days worth of inventory.

Pueblo West has about 20 sales and 60 homes for sale. So Pueblo West has 90 days worth of inventory.

Why is this important? It helps sellers know what to expect and buyers know where they may get more bang for their buck.