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Private listings can weaken bidding by removing visible supply signals

HousingWire argues that for scarcity to raise prices, buyers must be able to see a competitive shortage, not just be told that one exists.

Reported · Written up by our desk · PropTech

HousingWire says real estate agents often invoke “scarcity” to justify keeping listings away from broad view, but the strategy can fail when it removes the visible supply signal that makes scarcity work.

The outlet argues that research distinguishes between scarcity, where buyers can see a limited supply, and obscurity, where buyers do not know the item exists at all. It says prices tend to move up only when scarcity is visible and competitive.

HousingWire cites a 1975 study by Worchel, Lee and Adewole in the Journal of Personality and Social Psychology, in which participants rated identical cookies as more desirable and more valuable when they were in short supply. The article emphasizes that when the “jar” signal was removed, the effect disappeared because participants could not see how many were left or that others wanted one.

The piece concludes that a listing that is not visible to potential buyers is less like a nearly empty cookie jar and more like a cookie that is stored away in a drawer, limiting the competition that can drive higher outcomes.

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