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The car dealership covers most of its fixed operating costs with gross profits from service and parts operations, but this 90% absorption rate is unusual in the industry.
An absorption rate of 6 indicates a balanced market, while the current figure for the area of 9.2 shows that it is a buyer's market.
For example, suppose that a city has 1,000 homes currently on the market to be sold. If buyers snap up 100 homes per month, the supply of homes will be exhausted in 10 months (1,000 homes divided by 100 homes sold per month). If a homeowner is looking to sell a piece of property, he knows that half of the market will be sold out in five months. This rate does not take in to account additional homes that enter the market. The absorption rate can also be a signal to developers to start building new homes.
Англо-русский строительный словарь.Академик.ру.2011.
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