Definition of "Market absorption rate"

The rate at which a market can absorb additional units of supply without causing market saturation and severe price distortions. For example, during a recessionary period, many homeowners may list their house for sale. Since the supply of homes entering the home resale market increased without a corresponding increase in demand, the market absorption rate has been exceeded, and the market price of the resale homes declines.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

Method of finishing edges of walls, window jams, doors, or projections with decorative strips of wood to give a better appearance as well as providing protection from jagged edges and ...

Some plausible, but not completely clear-cut indication of ownership rights. It supplements a claim to title to property, but does not actually establish it. ...

The result of an act or a fact. ...

In insurance, charging the lowest rate accorded an insurance policy covering a minimum risk classification situation. For example, a homeowner's insurance for a home located within 500 feet ...

Tables used to compute the monthly mortgage payment that consists of principal repayment and interest. A loan amortization type of formula is used. The tables have monthly payments for any ...

The value of property subject to tax. The tax equals the tax rate multiplied by the property's value. ...

In order to define allotment, we have to take into consideration what it refers to. While generally, it refers to a certain amount of something that is allocated to a particular person, the ...

The term apartment is used when referring to a type of residential unit that is self-contained and occupies only a part of the building. Through self-contained, we understand that the ...

Range reconnaissance, or surveying, for the purpose of preparing grazing capacity estimates. There are two parts to a range survey: mapping of grazing cover varieties and associated ...

Popular Real Estate Questions