New York is a city full of people and due to that renters cant find good apartments with a reasonable price, As a result, sellers and buyers reluctant to jump into such a bumpy market are turning to the rental option, this article is written recently, it discuses the flowing prices of rent in the new york city, and how consumers are willing to buy and rent, as in how the companies are selling.
this article shows a straight forward idea about demand and supply and their determinants.
I would say this situation is common a situation, because the consumers are the firms that are buying products from the households, people income and taste and other things that i will mention later, determines the thing they want to buy. and this situation many companies closed their branches.
"As a result, sellers and buyers reluctant to jump into such a bumpy market are turning to the rental option, with demand so high for large and extravagant condominiums that inventory is in short supply, according to brokers, developers and data on the rental market." in other words a surplus of supply was created because of the small amount of demand, and because individuals consumers and companies are trying to invest their money and supply on something that will have a successful demand. now this were demand and supply are obviously stated: (Assuming the reader never took economics)
Demand: is concerned with the behavior of buyers. Describes a consumer’s desire, willingness and being able to pay a price for a specific good or service.
and supply: is concerned with the behavior of sellers. Describes the seller desire, willingness and being able to produce and supply products (goods).
both consumers and companies are demonstrating desire and willingness.
now the consumers willingness,desire and most commonly income was lower then what the companies wanted. so the companies(suppliers) tried lowering down the price and offering free rend months and making discounts.
all this will basically create a movement along the Demand curve, we might say trying to reach the equilibrium point for the consumers, now to reastate what an equilibrium point is (Assuming the reader never took economics):
Once a price reaches it’s equilibrium level, consumers and firms are satisfied, and wouldn’t make an action to change this presuppose that the demand and supply curves are fixed. Which means that all those factors that can cause a shifts in these curves are constant and unchanging, if something changes, the market will have to adjust to a new equilibrium and that's What the companies were trying to achieve).
Moving on to the next point Veblen goods, have a huge affect on this article:
(Assuming the reader never took economics);from our website:
Veblen Goods are luxury goods, that has "snob value". It is when the demand for that particular good rises as the price rises. This is because these high status/ priced items gives more satisfaction of owning. These goods are purely ostentation.
but since its a Veblen good we might assume that it has a special graph or just a normal demand graph because only a small amount and percentage of people are doing it. or it might even be a bandwagon effect. the reason i can't decide which graph it should be is because the relationship between the demand and price may differ.
Now this is connected because most of the consumers in this article were looking at a very expensive house or apartment that most of them can't afford. the last paragraph conforms my idea "says she has a new client who is renting an apartment for $60,000 a month and has decided to spend up to 18 months looking for something that he loves in the $10 million-to-$12 million range. “Rents are coming back because people can’t find the product they want for the price they are prepared to pay,” she said. “And if the sellers aren’t going to get a certain premium and they know they are sitting on a prime piece of property, rents become seductive.”, it also adds a new thought that if consumers can't find what they need, there forced at the end to change the price or the place.
i might conclude that is might be good, for sustainable development, to considering impact on future generations (sustainable development "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs."). Also afraid that the demand will get so high that most companies will back up because their not making much. using attractions and new ideas like in the article and new supply is just away to show that the competition is on. and to take away any possible disadvantages they have. like when " Mr. Trump is planning some renovations on the duplex penthouse to add bedrooms, as the demand appears highest for luxury rentals with more bedrooms than this one. About 25 of the 100 units in the building are currently rented, for $4,000 to $100,000 a month, Mr. Cohen said."
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