Housing Is a Commodity Not a Product

Sorry lots of advertising won’t work. Housing in many ways acts more like a Commodity than a Product. Advertising doesnt change the demand for a commodity like it can for a product.

Take Starbucks coffee as an example. The farmers make crops of coffee beans and sell them to Starbucks. Starbucks then sells lattes to its customers.

The lattes are a product, if Starbucks advertises lattes, they will increase demand and latte sales will go up.

The coffee beans are a commodity. If the farmers start to advertise to Starbucks to buy more coffee beans, Starbucks wont care at all. It will just figure out exactly how many coffee beans it needs and try and buy them at the best price it can.

In real estate terms, the sellers are like the farmers, the buyers are like Starbucks. Starbucks already knows it needs to buy coffee beans, just as buyers already know they need to buy a house.

Buyers know they want a house and don’t want to pay more than fair market value for it.