• The takeover ratio is commonly used in the real estate market to determine how many houses are on the market at a given time.
  • The equation can also be used to figure out how long it will take to sell an offer of houses on the market.
  • Real estate agents, appraisers and lending institutions use absorption rates to understand market conditions and adjust conditions accordingly.
  • An engulfing level above 20% usually signals a seller’s market, while an engulfing level below 15% indicates a buyer’s market.
  • Absorption rates are also used to determine and allocate overheads in accounting.