I’ve talked a lot about supply and demand over the last thirteen years, have I not?

I’ve shown you more than enough X and Y axes with curves and intersecting lines to denote levels of supply, levels of demand, and surpluses and deficits.

I’m not sure if Economics is still taught in high school, or if this somehow violates one’s “safe space,” particularly while one is not standing during the national anthem, but if it is taught, then hopefully somewhere in this city there’s a Grade 11 student who can teach a particular condo-seller in North York the very most basic concept of “Supply & Demand.”

What I saw last week was something that defies all logic.

It’s something that, if I hadn’t said it so much already, I’d be tempted to label, “Just When I Thought I’d Seen It All” in a blog post.

But as the regular readers know, “just when I thought I’d seen everything” happens far too often in this business, and the phrase “nothing surprises me anymore” is probably more appropriate.

Supply and demand is everywhere.  It’s in everything we do, it creates and affects so much of what we experience in life.

As I have alluded to many times on this blog, I recently took up an old hobby with my old man: collecting sports cards.  It’s something that my Dad, my brother, and myself started as a male bonding exercise around 1988, and something that kept us busy for the better part of a decade.

There was a store on Jones Avenue in the late 1980’s called “Miscellanea,” but since we didn’t know what that was, we simply called the store “Jones.”

Every few weeks, we would head over there to meet with the store owner, a man named Robin.  He taught us everything we knew about the sports-card hobby, from his very unique perspective.

Robin had a very rare collection of 1933 O-Pee-Chee hockey cards, and my Dad made Robin a deal: my Dad would purchase all the cards from Robin, but to keep things interesting, he would come back with my brother and I every couple of weeks and pick two cards at random.  The price would be $115 each (Robin was too honest to sell without charging tax), and the cards would be selected at random.

I had no interest in the 1933’s.  I was far more interested in 1980’s hockey and basketball, even though Robin kept telling me that I was “playing a fool’s game.”

In my eight or nine-year-old mind, I wasn’t just collecting; I was investing.  I watched the price guides every single month (for those who remember Beckett was the authority), and paid attention to the ups and downs of card values like a 1920’s stock operator.

Robin challenged me one day, probably around 1989.  He said, “Two weeks from now, bring me a list of 50 cards that you would want to own in 50 years, if you’re looking to invest.”

So I did.

I spent a considerable amount of time on this, and two weeks later, I brought in my hand-written, ruled 3-hole-punched sheet of Hilroy paper, and proudly handed it to Robin.  This was probably my sixth draft, purposefully highlighted and colour-coded, ready for examination.

Robin looked at the paper for, if I had to think about it, maybe three full seconds.  Then he took off his glasses as he shook his head, and said, “Nope.  Not having it.  It’s just no good a’tall.”

I was furious.  And my Dad smirking didn’t help the situation.

1985 Fleer Baseball, Jimmy Key, XRC?  Seriously?  That was going to be gold in fifty years!

1983-84 O-Pee-Chee Hockey, Steve Yzerman, RC?  You know the set – the one with the players’ photos in the bottom corner?  One of the prettiest sets of hockey cards ever made!  And Steve Yzerman was going to be a Hall-of-Famer!

1986-87 Fleer Basketball – oh so many!  Charles Barkley, Dominique Wilkins, Patrick Ewing, and um, somebody named Michael Jordan!  Still to this day, the most beautiful set of basketball cards ever produced, and in my top-5 of all time, in all sports.

Robin didn’t want to listen to any of this.

He said, “David, stick with your Dad.  He’s got the pulse on this one.”

My brother and I did help my Dad with his collection, for what it’s worth.  It was our collection.  1951-52 Parkhurst Hockey, likely the greatest set of hockey cards ever; that was our baby.  We collected everything through the 1950’s, and of course, the 1933’s.

Somewhere around 1994, my Dad put all those cards in a safety deposit box downtown.  And in typical my-Dad fashion, he lost track of them when an old branch of Bank of Nova Scotia closed, and its items were moved to another location, although I wonder if that even happened.

Every time I asked my Dad where the cards were, he’d say that he didn’t know.  Year after year!  Fast-forward to 2017, and our box was magically “found!”

This was a day I’ll never forget:

And now, almost a quarter-century later, I am collecting again.

But the industry has changed immensely since the early-to-mid 1990’s when we were last active.  The industry has been completely commoditized by a grading company called “Professional Sports Authenticator,” or PSA.

In the 1980’s, you’d simply pick up a card, examine it, determine its worth, and then make a decision about value on your own.

But today, with the stakes as high as they are, people want graded cards; cards that are examined by lab technicians with microscopes, assessed with a numerical value, and then encapsulated in tamper-proof plastic holders forever.

Oh wait – what of my “list of 50 cards,” that I gave to Robin?  Well, that crap all plummeted in value.  A Steve Yzerman rookie card might have run you $300 back in the late 1980’s, and now you can pick one up (ungraded, of course) for probably $20 at a card show.  Same goes for everything on my list, except the Michael Jordan rookie card.  So I was basically 1-for-50.

What did keep its value is the older stuff, and this is where supply and demand comes into the equation.  Yes, after this insanely-long introduction which has now basically swallowed this entire blog…

The reason why the 1985 Fleer Jimmy Key XRC has zero value today is twofold:

1) Nobody wants it.
2) There are tens of millions of them.

This failed both tests of supply and demand!

Those 1933 O-Pee-Chee’s?

Well, thanks to the commoditization of the hobby, you can find out exactly how many graded cards exist in this set:

Only 3,954 cards have been graded by PSA.

That’s not to say there aren’t more out there (I’ve seen hundreds of ungraded out there at shows, but there’s usually a reason why…), but these are the ones that have been graded by PSA, and thus collectors can rely on the consistency and authenticity of the grades.

Now to take things a step further, PSA has a “Population Report” that specifies how many of each grade exists, as follows:

That is for the entire 1933 set.

But you can look at each individual card, and see how many have been graded.

Then you can look up sales history for each card, at each grade.

Sound familiar?

The market for cards has been commoditized just like the stock market, and in a similar fashion to the housing market.

If you wanted to know what 230 King Street, #1501 is worth, you can look up the sales history for #1601, #1701, etc.

The same goes for, say, a 1951-52 Parkhurst Gordie Howe, PSA-8.  How many are there at each level of grading, and what are the recent sales?  You can see the sale dates, and the platforms (ie. auction, Ebay, etc.)

So now that I’m 1,200 words in, what the hell does this have to do with real estate?

Well, for one thing, it’s cool.  Just like my old man and I.  I know, I know, you’re reading all this, and thinking “chick magnets, both of them,” and what can we say?

Secondly, I figured this was a far more interesting lead-in than showing supply/demand curves.

But most importantly, I wanted to draw a comparison to what a recent property seller in Toronto has done, versus what my Dad and I did with our cards we wanted to grade.

Last week, a reader sent me this:

Okay, cool.  So there are eight crappy 1-bedroom units for sale in these two towers?

Who cares, right?

But if you look a little closer, you’ll see these eight condos all have one thing in common.

Is it obvious by now?

They’re all owned by the same person.

There are so many things wrong with this, I barely know where to start, but let’s try.

From a supply and demand standpoint, and this is true of condos, or of hockey cards, this makes absolutely zero sense whatsoever.

These are not just eight 1-bedroom condos.

These are not just eight 1-bedroom condos in the same building(s), because this is two towers in the same complex, no difference.

These are, in fact, eight identical units, with the only difference being the unit number, and I suppose, the view.

What in the world is this person thinking?

Did this person take Grade 11 economics?  Or maybe this is a recent graduate of our distinguished provincial public school system, and he or she was too busy complaining that “public speaking causes anxiety” or that dodge ball is an unethical tool of oppression?  No, really, this is where we’ve gone as a society, but I digress…

So let’s assume that these condos are not being sold under Power of Sale (because they’re not), and that there’s no duress, but even if this person needed to sell, and badly, flooding the market still wouldn’t be the way to go.

This “strategy,” if we can call it as much, ignores the very most basic tenets of supply and demand.

The seller could have put one unit up for sale, where it would have competed against………….wait for it…………..zero other units.  But instead, he or she didn’t do that.  He or she said, “You know what?  I think I’ll compete against myself and flood the market.”

I just don’t understand this.

Unit #911, #1111, #1511, #1611, and #1911 – this is the same goddam unit, five times!  This isn’t a pre-construction condo sales centre!  This is the resale market, and this seller has undercut himself!

Consider that the average buyer doesn’t know that these units are all owned by the same person, so the buyer will likely think, “Wow, there’s a lot for sale in this building!” and no matter where that line of thinking leads, it’s not going to benefit the seller.

The buyer might think that there’s a negative reason why there are so many units for sale.  Trust me, I get this all the time.

I had a listing last month where the very same unit next door was for sale, and so many agents were asking, “Is there something wrong?”  No, there’s nothing wrong.  It’s called “coincidence,” and yet nervous buyers (and their agents…) look for things that aren’t there.

The buyer might also think that there’s leverage, and I certainly can’t blame that buyer.  If you’ve ever been a buyer of a condo where the same unit is for sale two floors higher, you know you have the leverage, and both sellers are vying for your offer.

The buyer might also think that the longer he or she waits, the more leverage there is to be had.  I wholeheartedly believe that there is an inverse relationship between “days on market” and price, so the longer a property sits on the market, the less it’s going to sell for.  In this case, there are EIGHT of the same unit up for sale, all listed on the same day, all with the same number of “days on market,” and the longer they sit, the less leverage the seller has, and the lower the eventual sale price.

This seller has basically tied a rope around all eight of these condos, and while he’s trying to move one unit, the others are going to move along with it.  If one goes down, so do the others.  The same can’t be said for a sale, unfortunately.

Whether this building is hot, luke-warm, or ice-cold, the laws of supply and demand still apply.

If the building is red-hot, and there would be five or six “bidders” for a standard 1-bedroom unit, then putting EIGHT units on the market at the same time would simply thin the buyer pool, and prices would plummet.

If the building is luke-warm, and units sell relatively well but not in competition, then putting EIGHT units on the market at the same time simply alleviates any and every buyer of any sense of urgency, and that not only allows the “days on market” to rack up, but also eliminates the emotional premium buyers often pay along with that sense of urgency.

And if the building is ice-cold, well, this goes without saying.  It’s hard enough to sell one unit in the building in a reasonable amount of time, for a reasonable amount of money, so putting EIGHT units on the market at the same time makes it about eight times as hard.

No matter what market you’re in, this makes absolutely zero sense.

The seller should have listed one unit, sold it, then listed another.

He would have not only avoided every drawback listed above (competing against himself, creating over-supply, forcing ‘days on market’ to rack up, etc.), but he also could have created a benchmark price.

One listing, one sale.

Repeat.

One at a time.

It’s the same mentality that my Dad and I are implementing with respect to having a few of our cards graded.

We have in our possession four, 1951-52 Parkhurst Maurice Richard’s:

They are pristine.

We hope that they are graded PSA-9’s, but with only five such PSA-9’s in the world, we are weary of sending all four of our cards for grading at the same time.

So we are going to send one.  Then see how it comes back.

Then we will send another.

And then another.

And while this isn’t exactly the same thing as the condos being sold above, similar logic applies.

If these cards were revealed to be, say, PSA-7, PSA-8, PSA-9, and PSA-9 respectively, then so be it.  But if we submitted all four at the same time, would a professional grader, knowing there’s only five PSA-9’s in existence, give the same designation to two more, at the same instant?

Like I said, these cards should be what they should be.  And in a perfect would, they would be.  But we don’t want to take the chance that a grader gets emotional, or worse – thinks this lot is simply too good to be true, and it can’t be real.

Thus, one at a time.

But for a more exact analogy between the eight condos for sale above, and the now-commoditized market for vintage sports cards, let’s use the following example…

The most sought-after and expensive card on the planet is not the Honus Wagner T-206 that was first made famous when Wayne Gretzky and Bruce McNall purchased it in 1991, but rather a 1952 Topps Baseball Mickey Mantle, graded PSA-10 “Gem Mint.”  Experts value this card at $10,000,000, but of the three people in the world that own the card, none are likely to sell if offered $10,000,000.  Perhaps that’s a topic for another day, ie. how “value” is inaccurate when there is, in fact, no supply, and/or willing seller.

In any event, imagine a scenario whereby one of these sellers does put his card up for auction.  Maybe it fetches $11,000,000?  Or $15,000,000?  Who knows.  But there are a lot of insanely-rich people out there, who love tiny pieces of cardboard so much that they would pay these ridiculous prices!

But what if all three of these cards were put up for auction at the same time?  Suffice it to say, the sellers wouldn’t fetch the same prices?

And there’s my analogy, which, for some reason, I used half this blog post to introduce.  But what the hell, maybe you learned something new today!

Who knows, maybe the seller of those eight condos above was talked into this by an agent who wanted eight listings signed on the same day.

But bottom line: there’s absolutely no denying the position he or she has put him/herself in.  Voluntarily, knowingly, and intentionally, and that’s the toughest part for me to accept…