Why You Should Care about the Price Elasticity of Demand

Do you believe in Santa Claus? How about the economic principle of supply vs. demand? I’m guessing you put more faith into the latter than the former, so please take that faith just one step further and sign on to believing in the price elasticity of demand. It’s a real thing…I’ll save you a trip to Wikipedia, which says “Price elasticity of demand (PED or Ed) is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price when nothing but the price changes. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price.” When it comes to real estate, you should know that the demand for the home you want to sell most definitely is elastic. The lower the price ,the greater the demand. More demand = more inquiries = more showings = more offers = a higher selling price. My advice is to take advantage of this well-known economic concept when pricing your home for sale. You’ll be glad you did! Sebastian “Seb” Frey • CA Lic. 01369847 • Compass