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

Dehydrated gypsum that is mixed with water to form a rapidly setting material. Plaster of paris sets too rapidly to be practical for most building applications, but it is useful for ...

A recorded plat defines a subdivision map that you have to file in the county recorder’s office. It will show the location and boundaries of your parcels of land. Knowing this, we can ...

The definition of debt coverage ratio (DCR) or debt-service coverage ratio (DSCR) is on the pages of all finance coursebooks. It reveals the ability of an individual - but most ...

Statement filed with a governmental authority declaring property a homestead for the purposes of securing a homestead exemption. The declaration of homestead has no effect on the property ...

Bond whose interest is free of federal, state, or local tax in the state of the issuer. It is typically a municipal bond of estate or county agency. For example, a New York City resident ...

Invests in rental property but does not manage that property. ...

A zero lot line is a term in residential real estate that refers to houses that are either very close to or at the edge of the property line. These houses are also called zero lot line ...

Earthquake insurance is the type of insurance policy that specifically covers damages to your real estate caused by seismic activities. It can refer both to the rare coverage against ...

The definition of an open-end mortgage underlines the fact that the mortgage or trust deed can be increased by the mortgagee (borrower). The mortgagee may secure additional money from the ...

Popular Real Estate Questions