Episode#9 "Understanding Turnover Rate in Real Estate"

In this episode, April Salladay discusses the importance of understanding turnover rate in real estate markets. Turnover rate measures the speed at which properties are bought and sold, providing valuable insights for buyers and sellers alike. April explains that a higher turnover rate indicates an active market with increased demand, benefiting sellers. She shares a simple equation to calculate turnover rate: divide the number of properties sold or transferred by the total number of properties and multiply by 100. By tracking turnover rate, investors can gauge market activity, adjust pricing strategies, and make informed decisions. Understanding turnover rate is crucial in navigating the real estate landscape effectively.

Turnover Rate: (Number of Properties Sold or Transferred / Total Number of Properties) x 100 = Turnover Rate. (Use 12 month Numbers)

For example, if 50 properties were sold or transferred out of a total of 500 properties in a year, the turnover rate would be:  (50 / 500) * 100 = 10% Turnover Rate

Absorption Rate: (Number of Properties Sold or Leased / Total Number of Available Properties)

For example, if 25 properties were sold or leased in a month out of a total of 500 available properties, the absorption rate would be:  25 / 500 = 0.05 or 5% Absorption Rate 

Give April a call she can help you identify areas with the turnover rate you are looking for!