I calculate absorption rates in regards to homes sold per month. Thus, for South Lake Tahoe the absorption rate could be the number of homes purchased from the last year, 341, divided by the months in a year, there are twelve. 28.4 homes could be per month in South Lake Tahoe. This is the absorption value. (Feel free to skip outside of of this paragraph.) Some people like to share absorption rates in relation to its the volume of inventory. Our inventory in South Lake Tahoe is 476 homes. Thus, 28.4 homes is 5.97% of the inventory; so the absorption minute rates are 5.97% within the inventory per month.

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Running a profitable company in this economy is as much about keeping inventory lean since it is about boosting sales. But as everyone knows, that's easier said than completed. With demand fluctuations, supplier issues and tightening wallets, keeping the right balance of inventory is tricky understandably.

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