We've all heard the real estate mantra, "It's all about location, location, location." It hangs around because it's true, at least within the confines of human behavior. But, it's not the only factor in home prices, though arguably the most important. Let's take a look at the three factors I believe have the greatest influence on home prices.
Absorption rate is the number of months it would take to sell the currently listed homes in the market. That sounds simple, and the math is for the most part. However, it's an important concept, and it's used by a great many real estate related businesses to attempt to predict home prices and sales activity going forward.