The absorption rate is dependent upon an area's building sales, and how a specific property competes with local demand. Real-estate developers will consider the overall local demand for new properties, and how their properties compare to local supply, to determine the absorption rate, the ability to sell their new development.

For example, if new homes sales averages about 1000 new homes a year for an area, and a development is able to capture 5% of that market, their absorption rate is 50 properties a year. There are therefore two ways the absorption rate may change, either the number of home sales may change, or the properties' competitiveness may change compared to local supply.

Also known as Capture Rate

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