function calculateTurnover() {
var sold = document.getElementById("homesSold").value;
var total = document.getElementById("totalHomes").value;
var resultArea = document.getElementById("turnover-result-area");
var percentDisplay = document.getElementById("turnoverPercentage");
var interpretation = document.getElementById("turnoverInterpretation");
if (sold === "" || total === "" || total <= 0) {
alert("Please enter valid positive numbers. Total homes must be greater than zero.");
return;
}
var soldNum = parseFloat(sold);
var totalNum = parseFloat(total);
var turnoverRate = (soldNum / totalNum) * 100;
var finalRate = turnoverRate.toFixed(2);
percentDisplay.innerHTML = finalRate;
resultArea.style.display = "block";
if (finalRate = 2 && finalRate <= 5) {
interpretation.innerHTML = "Interpretation: Average turnover. This represents a healthy, balanced real estate market.";
} else {
interpretation.innerHTML = "Interpretation: High turnover. This is an active market with frequent movement, often ideal for real estate 'farming'.";
}
}
How to Calculate Turnover Rate in Real Estate
In real estate, the turnover rate (also known as the absorption rate or sales velocity in specific contexts) measures the percentage of homes in a specific area or neighborhood that sold during a specific period—typically one year. For real estate agents and investors, this metric is the gold standard for determining if a neighborhood is worth "farming" or investing in.
The Turnover Rate Formula
Calculating the turnover rate is straightforward. You divide the number of sales by the total inventory and multiply by 100:
(Number of Homes Sold / Total Number of Homes) x 100 = Turnover Rate %
Why Turnover Rate Matters
For Real Estate Agents: A high turnover rate (usually above 5%) indicates a neighborhood where people move frequently, providing more opportunities for listings. If the rate is 1%, you might spend a lot of marketing money with very few opportunities to list a home.
For Investors: Turnover rate helps gauge liquidity. If you plan to flip a house, you want to see healthy turnover in that specific zip code to ensure buyers are active.
For Homebuyers: A very high turnover rate might indicate a "transient" neighborhood, while a very low rate indicates a neighborhood where residents stay for decades.
Example Calculation
Imagine a neighborhood called "Oakwood Estates" that has exactly 500 houses. Over the last 12 months, property records show that 25 houses were sold.
Using the formula: (25 / 500) = 0.05
Convert to percentage: 0.05 x 100 = 5%
In this scenario, Oakwood Estates has a 5% turnover rate, which is generally considered a healthy and active market for real estate professionals.
What is a "Good" Turnover Rate?
While "good" is subjective, the following benchmarks are commonly used in the industry:
0% – 2%: Low turnover. These are often established, older neighborhoods where people tend to retire or stay long-term.
3% – 7%: Standard turnover. These are typical suburban neighborhoods with a mix of families and professionals.
8% or Higher: High turnover. These are often found in areas with many starter homes, military bases, or rapidly developing tech hubs where people move for work frequently.