From what i can see in the Little Rock Market, there is increase in time on the market, and there is increase in planed supply of new Multifamily building. these 2 factors can create an absorption issue. maybe the report is referring to these 2 factors. 

I have seen no indication that apartment absorption rates are causing lower prices, quite the contrary from everything I've read from sites like the TBJ (eg.

Population growth - trending up is goodIncome growth (or converse is the unemployment rate)- trending up is good (income); trending down is good (unemployment rate)Building permit filings - compare it with market absorption - if more permits are being filed but the market is not absorbing it, it could indicate a market is being overbuilt so not good to invest thereForeclosure filings - this is a leading indicator of price decline (if there's a huge uptick with this metric I will be worried)How real estate developer friendly is the city - so watch press releases from local goverments or call them to find out their 5-year development plan

Also absorption should not be an issue if it’s a good and sought after location.

It is located in an area that I know will have normal absorption of vacant residential units, but abnormally long vacant periods for the retail space. 

I’m looking for data sources for occupancy rates, absorption rates, and net resident in/outflow broken out by zip or neighborhood.

If you have a REALTOR on your team ask them to provide you with absorption reports specific to the market you are investing in.

I'm skeptical of a profit number that high, though, and in most markets I'd be concerned about trying to flip a house in the 700K range because unless you live in an expensive market that's probably (significantly) above the median home value and is more likely to have a slow absorption rate (the more expensive the house, the fewer buyers out there can afford it).Whether your numbers are accurate depends on whether your estimate on ARV and rehab cost are correct.

what do youb mean absorption .

Right.I think you are attempting to determine the absorption rate and months of existing housing stock right?