Absorption Rate Definition

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. A simple definition is the number of months it takes to sell the current inventory at the present rate of sales.

Comments

Popular posts from this blog

Property Taxes in Colorado How are they determined and what can I do about it?

48% of Homes Sell in Less Than a Month in 2017

Why Are So Many Trees Dying in Colorado?

1.25% Mortgage! is it possible??!!