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WHAT DOES BUYING 50 PAIR OF GYM SHORTS HAVE TO DO WITH SELLING REAL ESTATE?

By
Real Estate Agent with Keller Williams Realty Lafayette/West Lafayette, Indiana

 

 

What does buying 50 pair of gym shorts have to do with selling real estate?

 

It was the spring of 1977 and after spending  several weeks with relatives in Albuquerque I was ready to return home with an incredible find back to my hometown of West Lafayette, Indiana.  What Southwest treasures did I have to take back from the Land of Enchantment to mundane Indiana?  I did value and treasure the beautiful Navajo sand paintings, rugs, and turquoise jewelry, the Hopi Kachina dolls, the incredibly beautiful pottery of the Acoma, San Ildefonso, and Santa Clara pueblos; but not on this trip. 

Thank God for the ACLU (oops sorry ACLU, I forgot!), the 1st Amendment,  and a non-conforming gym student I was ABLE TO PURCHASE 30 pair of formerly required Albuquerque Public Schools gym shorts for 50¢ a piece!!!! There were many more gym shorts, but what fool needs more than 30 pair of shorts???  At 50 cents each that was plenty!   I thought they were a very STYLISH battleship grey color and had a very attractive diamond logo with the letters APS inside it.  Gosh, back in Indiana I could tell everyone that APS stood for: ATOMIC PERSPICACIOUS SCIENTIST and everyone would just think I had the greatest gym shorts around! (For those of you not from the Hoosier state-it doesn't take much to excite us)  We Hoosiers tend to buy anything from such exotic places as LA, Paris, or New York.  Jane Peters and Laurie Mindnich could made a fortune selling their used dental floss on Ebay to us rustic Hoosiers as long as they said it was from LA or NY!!!

I was ready to turn EAST to head back to the Hoosier state along Central Avenue(old Route 66)  when an unexplained presence directed my steering wheel to turn right toward downtown Albuquerque.  It was as if Horace Greely's presence was saying, GO WEST YOUNG MAN, GO WEST!!!  So I returned back to Cook's Sporting Goods store just to take one last look at the 50 cent APS gym shorts and I COULD NOT BELIEVE IT!!!     My gym trucks had been reduced in price to 25¢!!!!! 

       

Guess what???  I bought 20 more pair of APS gym shorts because it was half off the previous price even though I swore I was NOT going to buy anymore gym shorts in Albuquerque!

WHAT DOES BUYING 50 PAIR OF GYM SHORTS HAVE TO DO WITH SELLING HOUSES????   PLENTY!!!

We are all familiar with THE LAW OF DEMAND.  As price goes up quantity demanded goes down, and as price goes down, quantity demanded goes up. 

The LAW OF DEMAND OPERATES BY THREE CONCEPTS:

1.  THE INCOME EFFECT:   If the price of an item goes down  we think it is a good deal and we buy a greater quantity of the item.  Several years ago NY strip steak was decreased in price from $9.95 per pound to an incredible $2.95 per pound for one week.  I went to the store every day and bought all the NY strip steaks they had while the sale lasted.

2.  THE SUBSTITUTION EFFECT:  If the price of an item goes up we replace it with a close substitute(if we can).  When the NY strip steak went off sale and back up to $9.95 per pound I only bought the cheaper sirloin steak or hamburger.

3.  DIMINISHING MARGINAL UTILITY:  To an economist "utility" is the satisfaction or usefulness we derive from consuming a product.  As we "consume" or buy more of a product( gym shorts ^_~ ) the satisfaction we derive from the product declines at that current price.  Several years before I retired from teaching the cafeteria was closed(the students all cheered!!!!!!!) for a major remodel.  The students went to the gym for lunch where FAST FOOD VENDORS each took turns selling the students their lunches.  The hands down favorite was PIZZA HUT as the kids loved their huge, $1 per slice pieces of pizza.  Many students readily devoured two, three, sometimes even four pieces of pizza at $1 each.  The UTILITY (satisfaction) for the pizza diminshed with each additional  slice they purchased at $1.  GUESS WHAT HAPPENED WHEN THERE WAS A SURPLUS OF PIZZAS AT THE END OF THE LUNCH HOUR AND PIZZA HUT SOLD ENTIRE BOXES OF UNOPENED PIZZAS FOR $1???? 

Those individuals who were filled up on pizza at $1 a slice and who would buy no more went crazy and bought entire large pizzas for $1.  The kids who ate the last lunch hour got the INCREDIBLE deals!!!!!  DIMINISHING MARGINAL UTILITY!

In the Lafayette area investors are buying up the HUD homes, REO's, and foreclosures TO BE through SHORT SALES!  They are reacting to the INCOME EFFECT because those homes are great deals in this current market along with the historic low interest rates. 

I am working my data base of teachers/athletic officials( I retired from teaching at the start of August and launched a new career in real estate) and one colleague who told me he couldn't afford to buy another rental responded positively to one of my emails back in September.   He was my first closing right before Thanksgiving and it was clear that this was his last rental to be bought for some time.  Do you think I sent him an email on an incredibly low priced property in great condition even though he wasn't able to buy anymore investment properties????  Remember DIMINISHING MARGINAL UTILITY (me buying the 20 extra shorts because of the insanely lowered price-even though I didn't want anymore gym shorts) ?????You bet I did, and we made an offer on Thursday night but the house was sold right before we submitted the offer.  Can you believe a REO selling in under five hours from the initial offer?  Am I discouraged?  NO WAY!!!  I have the law on my side!  (The Law of Diminishing Marginal Utility)

Because of the income effect I had two accepted offers on Thursday with investors (the same day I lost the other offer) !  I look at this market shift as an incredible opportunity to find properties for investors and that is how I am I am contacting people through my data base. 

THE LAW OF DEMAND, if properly understood can give us agents an extra edge if we know who it is that is responding to its beckon and call.  By the way, I am so glad I don't have to explain to such a sophisticated audience what I did with all those gym shorts.  My ECONOMICS students and students in the hallways who I did not even know would stop me and ask me about what I did with 50 pair of gym trunks for only $20! 

Let's see, what would a single, low paid teacher who was going broke buying wedding presents for all his high school and college friends while being overwhelmed by Christmas gift lists, and being invited to endless graduation ceremonies do with all those gym shorts????  Hmmmm. . . .  .

 Wedding Present?    GYM TRUNKS!!!

 Christmas Present?    GYM TRUNKS!!!

 

GRADUATION PRESENT?   GYM TRUNKS!!!

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Comments (50)

Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Did you get married in the mid-late 80's?  My husband had the same glasses and mustache as you and I had the same hair as your wife:)

Feb 27, 2010 12:21 PM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Sharon and I were married on flag day in 1986.  (I still have the same glasses, Renee!!!)

Feb 27, 2010 12:24 PM
Debbie Walsh
SHAHAR Management - Middletown, NY
Hudson Valley NY Real Estate 845.283-3036

So Bruce my buddy-I keep coming here to comment but there is nothing new!  :-)

 

I have a post for you coming soon!

Mar 01, 2010 12:40 AM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

But there is Debra! Read between the lines! My first investors who have closed on properties with me are NOW LOOKING for more investment properties at a lower price. (because I am still sending them new REOs that come on the market)

DIMINISHING MARGINAL UTILITY! 

Isn't ECONOMICS great???!!!   ^_~

Mar 01, 2010 12:54 AM
Sandy Shores FL Realtor®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Bruce, Loved this post - I was cracking up. You should be a stand up comic!  50 pair of gym shorts - for how many years did you wear those shorts, and did you ever wear anything besides those shorts?  Hmmm.  So, true, this is a lesson in supply and demand.  Great post! 

Mar 02, 2010 01:29 AM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Sandy, I wish I would have bought all the remaining shorts when the price was cut in half.  I think my last ones made it up till the early 90's.  I shouldn't have given so many out as wedding, graduation, and Christmas gifts!!!   ^_~

Thanks for stopping by and your kind words.

Mar 02, 2010 03:24 AM
Elyse Berman, PA
LoKation Real Estate - Boca Raton, FL
Boca Raton FL (561) 716-7824

Bruce - I loved your post.  I'm from New York and we wore gym shorts too, though I can't remember how much we paid.  I'd bet it was more than a quarter!   Great story and great photos!

Mar 03, 2010 11:43 AM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Thank you very much, Elyse!  It was always one of my favorite stories to tell when I taught Economics!  The students could NOT believe that someone would buy that many gym shorts.

DIMINISHING MARGINAL UTILITY!!!

THANKS for visiting and your very kind comment!

Mar 03, 2010 12:18 PM
Deena Cottingham
GreenApple Staging & Images, Calgary Staging & Photography - Calgary, AB
Home Stager & Photographer

Okay Bruce . . . that was some story . . . and some steal of a deal!

Mar 16, 2010 12:59 PM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Sorry I made you read so much Deena, as I now know the post was way too long!! Thanks for sticking with it; hopefully the story was worth it.  ^_~

Mar 16, 2010 01:05 PM
Maya Thomas, Broker
Tampa, FL
Please see my client recommendations.

HAHAHAH!  So true... we've all done this before.  I love how you connected the shorts with real estate.  Excellent post Walter!

Aug 24, 2010 05:17 AM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Thanks so much, Maya!  This was one of my favorite stories to tell my ECONOMICS classes.  They always wanted to know what I did with all those gym shorts.  I am so glad you followed the link to visit the post!

Aug 24, 2010 07:24 AM
Shanna Hall
Real Estate Solutions - Kirkwood, MO
I love selling houses!!!St. Louis, MO 314-703-1311

Bruce- I am going to think about you ever time I see a pair of gray gym shorts now!  Wear them proudly;)

Jan 10, 2014 07:09 AM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Shanna, the suppy has run out!   I guess I gave too many away as wedding, Christmas, and graduation presents!!!   ^_~

Jan 11, 2014 02:55 AM
Yolanda Cordova-Gilbert
Richmond, TX

Bruce,

 Great lesson in economics and great way to solve your endless need for "presents" however, I would have gone for the Kachina Dolls or the jewelry. PS I used to live in New Mexico and truly believe it is the Land Of Enchantment!

Aug 17, 2014 05:28 AM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Yolanda,

I do have a couple of kachinas portrayed in some Jerald Sherman sandpaintings.  The gym trucks were much more affordable!  ^_~

 

 

 

 

 

 

Aug 17, 2014 07:50 AM
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-739-3843

OH, Bruce, the mileage you've gotten out of those shorty-shorts is amazing! GREAT story, GREATER storyteller. 

Were they only for men? That right there would diminish your marginal utility, making it be more in demand for women willing to wear men's shorts...or is that simply reverse psychology? (You can't have them, so you want them that much more!)

May 09, 2015 06:57 AM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Gayle Rich-Boxman Fishhawk Lake Realtor (503)755-2905     

I am so glad that you took the time to hit my incredibly expansive archives of 73 total AR posts.  (probably took you two minutes to go through them all!)  So many goodies awaiting your exploration!

I just loved teaching Economics so it was really fun to write this post.  This was one of the stories I shared to illustrate Diminishing Marginal Utility and I would have kids stop me in the hallway who I never had in class and ask me if it was true that I bought 50 pair of gym trunks!  Miss teaching a lot!

Jun 25, 2015 09:37 AM
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Well that was pretty funny, but a good lesson in economics!

Mar 04, 2017 06:54 PM
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Georgie, many of my Econ students liked that story as well as a lesson in Diminishing Marginal Utility!  

Mar 05, 2017 05:21 PM