Mktg_Equlibrating_Process

Marketing Equilibrating Process No better way to see the marketing equilibrating process but by evaluating, an economic decision based on a “real life” experience dealing with buying a first home. Within this marketplace, sellers (“suppliers”) offer goods or services for sale and buyers (“demanders”) purchase said goods or services (McConnell, Brue, & Flynn, 2009) The author’s experience with this type of transaction came in 1997 with the purchase of their first home. They were living in Southern California, specifically the city of Whittier (Los Angeles County). They were renting a small 1700 square foot home. The upcoming birth of their first child was bringing new standards to their attention, such as the school system, crime levels in the area, and a better community to raise their child. They knew it was time to purchase their first home. They had already been looking in neighboring cities for about six months prior to learning about the new addition to their family. At the time, the one home that fit their budget and location was a repossessed home in the city of Placentia, California (Orange County). The purchase price for $195,000 was set because of the purchase agreement with the bank so there was no room for negotiating the price. This price was well under market value of other homes in the area. The home was a modest two-story 2200 square foot single-family dwelling. They lived in this home for the next three years, making small, but major improvements to the home. Around the time they purchased this home, the real estate market was starting to go full swing; new construction started progressing, and there was a huge influx of people wanting to take residence within the state. This situation sets the stage for an inadequate amount of available homes and creates conditions in which choice of purchases based upon poor emotions and restricted options (McConnell, Brue, & Flynn, 2009). The product demand for single-family housing far exceeded the availability of homes and created a somewhat scarce economic resource in that of “housing.” In February 2001, the author’s family moved back to Albuquerque to be closer to the grandparents. It took about six months but the sale of their first home was complete with a sale price of $330,000. At the beginning, there is a change in demand because of the increased number of buyers (determinant) in the market and the shortage of available homes. They did not realize how much this concept would affect the sale of their first home three years later and how much they would benefit from it. What goes up will usually comes down and eventually the availability of homes (supply) increased; the rush for homes decreased; home prices leveled off; and the real estate market heads for a downturn. Reference McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics Principles Problems and Policies (Eighteenth Edition.). : .