Market Absorption Rate


Definition of "Market absorption rate"

Scott A. Field
Scott A. Field Signature Real Estate

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.

Have a question or comment? We're here to help.

 
 
 
*** Your email address will remain confidential.
 
 

Search Real Estate Terms

Popular Real Estate Terms

Popular Real Estate FAQ