I hear it all the time in the auction business … “Nobody wants your … whatever.” Yet, why don’t “they” want your “stuff?” Besides that “they” never have wanted your “stuff,” it’s likely there is too much supply of your “stuff.”
When a property is in short supply, there is a scarcity of whatever that subject property represents. There is almost always a demand for scarce property. Many believe that scarcity causes more demand. It seems as humans, we seek out unusual, unique, scarce items as compared to common (easy to find) items.
It would also follow that for buyers looking for any certain property (item) the theory of “substitution” would apply, in that if that buyer can find a lower-cost alternative (which is quite likely with lots of supply) then the substitute is preferred.
Prices at auction are a result of supply and demand. When there’s more demand than supply, prices increase and when there’s more supply than demand, prices generally fall. However, as we’ve suggested here, we believe supply generally drives the human emotion (desire) to buy or not, and as such directly affects prices.
One only has to think of any generation buying the same style of furniture, decorative items, cars, and the like for maybe 10-15-20 years, and then when those same people just begin to sell, prices are initially strong, but soon thereafter decrease as far more supply enters the marketplace.
For instance, in the 1980’s we could easily sell a set of Haviland China (service for 12+) for well over $1,000. Gradually, we saw prices fall ($800, $500, $300 … $10) in the following decades as more and more people were disposing of their so-called “good china.”
We’ve certainly noticed the younger generation isn’t interested in the same types of personal property (or real property) as their parents and grandparents — but is it because they don’t like it, or more so because it’s so abundantly available? We believe the increased supply is likely the culprit.
We wrote about people collecting that which they experienced between the ages of 6-13 and this follows that at the age of 45-65 those same items would be in relatively short supply — and then thereafter fall in price in the following years with increased supply and accordingly less demand: https://mikebrandlyauctioneer.wordpress.com/2015/08/10/what-some-collectors-cant-find-buyers/.
To further substantiate our point, there’s probably not an auctioneer alive who isn’t sensitive to “flooding the market” with any certain specific property — even with a wide-ranging buyer pool. When there is too much of one property, it creates a supply-demand problem for a seller, but as gives buyers the perception of a lack of scarcity, which further suppresses demand.
As such, we would suggest you agree that supply is likely the key issue, driving whatever demand that exists — and of course, not only your supply — but “the supply” available in the marketplace compared to the worldwide marketplace full of potential buyers.
Lastly, demand certainly plays a role, but supply seems to determine prices more than demand. Why does “nobody” want your stuff? It’s likely there is so much supply, there isn’t sufficient demand.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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