There are tricky terms on real estate market reports, but they’re easy to understand with just a bit of review. Our Real Estate Terminology Cheat Sheet breaks each Market Report term down into easily understandable definitions.
Absorption Rate: A market’s absorption rate is the number of months it would likely take to sell all the homes currently listed on the market. It is usually calculated by dividing the number of homes that have sold over the last six months by the number 6. This yields the average number of homes that have sold each month. The number of homes currently on the market is then divided by the average number of homes that have sold over each of the last 6 months, which yields the current absorption rate.
Average: The average is determined by adding all the numbers in a set together and then dividing the total value by the number of numbers in the set.
Average Days on Market: A market’s average days on market is determined by adding all listings’ number of days on market and then dividing that number by the number of listings on the market.
Average Price per Square Foot: A market’s average price per square foot is calculated by adding up the price per square foot for all homes on the market and then dividing the total value by the total number of homes on the market.
Average Sale Price: A market’s average sale price is calculated by adding up the value of all homes on the market and then dividing the total value by the total number of homes on the market.
Blended Average: Also referred to as weighted average, a blended average is calculated by determining a data set’s average number and then multiplying that number by the percent of occurrences presented by each subset within the number set.
Concession: Concessions are bonuses offered by landlords to attract renters and lower their vacancy rates. Common concessions include one or two free months of rent or a landlord-paid broker’s fee.
Contracts Signed: Contracts signed refers to the number of contracts that have been signed within a given time period.
Days on Market: Sometimes referred to as Marketing Time, the number of days a property spends on the market is determined by counting the number of days from when the property is listed until it goes into contract.
Last Ask vs. Sale Price: Also referred to as the Negotiability Rate or Listing Discount, the difference from last ask to sale is how much of a difference there is between the last list price and the sale price, typically expressed as a percentage of the asking price.
Listed Inventory: Listed inventory refers to all inventory that is currently listed on the market.
Median: A median figure is determined by arranging all numbers in a set from least to greatest, then selecting the middle value. If there are two middle values due to an even number of values on the list, the median figure is determined by calculating the average of the two middle values.
Median Sale Price: A market’s median sale price is determined by arranging the prices for all the homes on the market in order from lowest to highest in value. The middle price is the median sale price. If there are two middle prices due to there being an even number of prices on the list, the median sale price is determined by calculating the average of the two middle prices.
Net Effective Rent: Net effective rent refers to the total amount of rent that a tenant will pay after concessions have been calculated.
Price per Square Foot: Price per square foot is determined by dividing the sale price of a home by the number of square feet in the home.
Quarter: Quarter refers to a three month period in a year and is divided as follows:
- Quarter 1 (Q1): January, February, March
- Quarter 2 (Q2): April, May, June
- Quarter 3 (Q3): July, August, September
- Quarter 4 (Q4): October, November, December
Ready for some more rental words? If you’ve been looking to rent an apartment, you may find some of the terminology tricky. To help you with some of these, check out our handy NYC Apartment Rental Dictionary now.