The world is not in the mood to buy assets. Not right now. It is filled with fear over the future and asset prices are falling. Whether you’re talking million-dollar properties on the Atlantic Seaboard or upmarket apartments in London, prices are falling.
So, what do you do when you thought your house was worth 30% more than the buyer is willing to pay; or you planned to sell your investment portfolio to finance a business venture and the value declined substantially? Or worse, you paid 30% more for the property and now you need to sell it to move on with your life.
You wait. Or you accept that you were not a seller two years ago when the market was at its height and you sell. Even at a loss.
It’s important to remember that if you used the asset, i.e. if you stayed in your house for a decade, then it had value to you. It’s an important perspective to hold onto. If you need to sell it, to move on to a retirement village or another city, you go ahead and sell it. Even at a loss.
It goes without saying that the asset you are buying should also have lost some value, even if it wasn’t as much as you have lost.
Almost 20 years ago, we bought our elegant old home in such a market. We didn’t make as much as we would have liked on our smaller property, but we could only afford the larger property in the established neighbourhood because the market had disappeared. Right now, we are selling that property. It hurts to think that we could have achieved 20-30% more two years ago, but we want to move on with our lives.
If you cannot stomach the loss or simply cannot afford the thing you want to do next because you bargained on obtaining the higher price, you must wait; but you may have to make peace with the fact that you will wait a long time. Or forever. Things change and the price may never reach the level you had in mind.
You’re a seller now. You were not a seller years ago when you could have achieved a better price. It only had paper value at that time. So, sell.