Have You Been Panic Buying These 4 Things?

Have you noticed how, in the pandemic era, people have been panic buying, stockpiling, and hoarding more than usual?

Panic buying is when consumers buy unusually large amounts of a product in any of these scenarios:

• In anticipation of a disaster or perceived disaster
• following a disaster 
• in anticipation of an incredibly large price increase or shortage

The irony of it all is that there tends to be no shortage to begin with; the panic buying itself precipitates the very shortage people fear. It is a self-fulfilling prophecy of sorts.

That, in turn, causes prices to soar and, in the worst cases, price gouging. Talk about a terrible domino effect!

Here are four things people have bought in droves at some point within the past 14 months:

1. Toilet Paper and Hand Sanitizer. We witnessed both of these fly off the shelves like hotcakes almost immediately after COVID-19 was declared a pandemic. My wife and I ventured far and wide to snag toilet paper, to no avail. It says a lot that we had a difficult time finding either item on Amazon. And once they finally became available, the prices had been jacked up astronomically. That is the law of supply and demand for ya!

Merchants advised people not to hoard these products -- as there was no shortage of either -- but they didn't listen, which led to -- you guessed it -- shortages.

2. Houses. When COVID struck, many feared a housing bust reminiscent of the Great Recession years. And while we did see something of a slowdown in the beginning, by summer the real estate market really took off -- and hasn't looked back since. 

In the U.S., the number of sales of existing homes reached the highest level in 2020 since 2006, at the peak of the housing boom. House prices rose 9% in 2020 and have continued to climb, with the median price of an existing home hitting a historic high of $329,100 in March. 

Lower interest rates coupled with people having more disposable income (thanks to stimulus and the facts many have not been traveling and eating out as much) have contributing to the unprecedented buying frenzy. It's as if sitting around the house for so long has spurred them to seek bigger, more spacious properties at good prices, even if it means moving from urban cores to the suburbs.

And the same phenomenon is playing out around the world, from Brazil to Portugal. 

To put it all in perspective, people aren't just snapping up the houses without having previously visited them. They're offering 50-70% above asking price and throwing in vacations to sweeten the deal. Madness!

3. Gasoline. This is the most recent instance of panic buying and hoarding to make headlines, and it isn't even COVID-related. In certain parts of the U.S., as people have panicked over a ransomware attack on one of the nation’s largest pipelines, gas has become the new toilet paper.

Americans started panic-purchasing gasoline after Colonial Pipeline came to a temporary halt this week, driven in part by social media-fueled fears that the supply would be exhausted. By Thursday, about 70 percent of North Carolina’s gas stations didn’t have supply, as well as about half of  stations in Georgia and South Carolina. 

Federal and state leaders tried to assure the public they were not at risk of running out of gas, and asked people to avoid buying or hoarding gas they didn’t need urgently, but consumers rushed to fill up nonetheless, causing supply in many places to dwindle quickly.

Because these consumers continue to buy into the fears being peddled on social media, they make it hard for the rest of us once we have a genuine need for this stuff. 

The moral of the story? Emotion plays an oversize role in our behavior, and consumption is no exception. The fear of missing out -- of being left out -- is unquestionably powerful.