Over at Curbed DC, I posted a chart in my regular Three Cents Worth column titled “Length Of Time On The Market Is Right About Average” showing how monthly absorption rate has behaved in the Washington, D.C. metro area over the past decade.
I like the absorption rate as a market indicator because it shows the interaction between supply and demand.
In the above chart the absorption rate measures the number of months to sell all active inventory at the current pace of contract signings (new pending sales). A lower rate means a more efficient market.
In the past several months the rate has hovered just below the 10-year average.