A powerful law of persuasion is on display in New York City Real Estate on a daily basis, except for the 2008 – 2009 slide, and it is the law of scarcity. It states that when resources are scare, people put more emphasis on having them. For example, there is a sale at a store with one jacket hanging on the rack and a few people interested in the jacket. The value of the jacket in the prospects minds increases because their is only 1 left and other people are interested (they could lose the jacket). The resource in the example is scarce or limited so greater value is placed on acquisition.
We’re seeing this in primer neighborhoods where not many turn key units have been hitting the market and demand is strong. Prospects see the apartment or loft as a scarce item and the other interest will invoke the law of scarcity, causing some prospects to over pay to acquire the apartment or loft.
Some salespeople try to use this practice regularly by saying if you don’t take this now it will be gone later. Keep it in mind when viewing property and engaging salespeople.