Post by unlawflcombatnt on Jul 24, 2009 14:01:35 GMT -6
The term "pent-up demand" is an oxymoron.
According to standard economic theory, individuals have almost unlimited "wants." Wants only become demand when the means to fulfill those wants exists. And wants without the means to fulfill them creates 0 demand.
On the opposite side of the coin, wealth without the "want" creates no demand either. Regardless of means, few people would "want" a square wheel. Regardless of means, few people "want" a live scorpion. As such, there's no demand for such items.
Accordingly, the term "pent-up demand" is an oxymoron. There's no such thing. If people have wants that cannot be fulfilled for financial reasons, they're simply unfulfillable wants. If they do have the means to fulfill certain wants, and don't fulfill them, it means demand for those wants isn't enough to justify paying the asking price. Again, this is NOT "pent-up" demand. It's simply insufficient demand on the buyer's part--causing the buyer to be un-willing to pay the asking price for the good, asset, or service.
For example, if I have $200K and want to buy a house, the fact I won't pay $500K means only that there's insufficient "demand" on my part to buy the house. It does NOT indicate I have pent-up demand. Since I don't have the means to convert my "want" for the house into "demand," it means only that there's a lack of demand.
On the other hand, if I have $600K to buy the same $500K house, yet still don't wish to buy it, it again indicates a simple lack of demand on my part. In this latter case, I don't have a sufficient "want" to justify paying $500K for the house. As before, this is just a simple lack of demand. As before, the price is still too high for my demand level.
Neither case indicates "pent-up" demand. Both indicate simple lack of demand for a house at the asking price. There's nothing "pent-up" in either case. (Except maybe the seller's unwillingness to drop the price.)
There's no such thing as "pent-up" demand. It's an oxymoron. It's a disingenuous, illogical, contradictory term concocted by low-lifes in the Corporate media, especially in real estate. The term's goal is deceive investors into thinking a magical floodgate of demand for some asset is about to burst open, with demand materializing out of thin air.
According to standard economic theory, individuals have almost unlimited "wants." Wants only become demand when the means to fulfill those wants exists. And wants without the means to fulfill them creates 0 demand.
On the opposite side of the coin, wealth without the "want" creates no demand either. Regardless of means, few people would "want" a square wheel. Regardless of means, few people "want" a live scorpion. As such, there's no demand for such items.
Accordingly, the term "pent-up demand" is an oxymoron. There's no such thing. If people have wants that cannot be fulfilled for financial reasons, they're simply unfulfillable wants. If they do have the means to fulfill certain wants, and don't fulfill them, it means demand for those wants isn't enough to justify paying the asking price. Again, this is NOT "pent-up" demand. It's simply insufficient demand on the buyer's part--causing the buyer to be un-willing to pay the asking price for the good, asset, or service.
For example, if I have $200K and want to buy a house, the fact I won't pay $500K means only that there's insufficient "demand" on my part to buy the house. It does NOT indicate I have pent-up demand. Since I don't have the means to convert my "want" for the house into "demand," it means only that there's a lack of demand.
On the other hand, if I have $600K to buy the same $500K house, yet still don't wish to buy it, it again indicates a simple lack of demand on my part. In this latter case, I don't have a sufficient "want" to justify paying $500K for the house. As before, this is just a simple lack of demand. As before, the price is still too high for my demand level.
Neither case indicates "pent-up" demand. Both indicate simple lack of demand for a house at the asking price. There's nothing "pent-up" in either case. (Except maybe the seller's unwillingness to drop the price.)
There's no such thing as "pent-up" demand. It's an oxymoron. It's a disingenuous, illogical, contradictory term concocted by low-lifes in the Corporate media, especially in real estate. The term's goal is deceive investors into thinking a magical floodgate of demand for some asset is about to burst open, with demand materializing out of thin air.