Quote:
Originally Posted by ncrx
No buyers, no sellers
people who arent in need of selling simply won't sell.. i dont see how someone is going to realize an immediate 20% loss unless they're in dire circumstances forcing them to sell
just b/c sales numbers are ugly doesn't mean suddenly everyone's dropping their house on the market for a fat discount
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You don't understand how the market mechanic works. And if one is looking at RE as investments, they better set their stop-loss and take-profit point clearly.
Once it starts dropping and the population has a negative outlook toward such asset, it's all downhill from here on for a long time.
To give you an example, your comment is exactly what people in Taipei were saying when the market stopped growing. They all said "it's ok, we bought in when it was cheap, we can wait it out."
Then what happened? They started realizing that the later they sell, the less amount of money they'd get. So it's a bloodbath there now. Tons of supply, very very few transactions getting done unless massive discount. Taipei core is experiencing double digit YoY decline in price. Sure you could hold all the way until the next boom (assuming there'd be one). But does that make sense investment-wise? It could be another 10-15years before getting to the next boom. And Assuming you can take 1M today for your property (down from 1.2). How long would it take to get back up to 1.2 (+any inflation adjustments)? It would make sense to sell now, hold onto cash and buy in when the market dropped further.
Many of these people in Taipei bought them in cash with little to none pressure of selling. It's all down to that feeling of losing a huge chunk of money every month of continue waiting. And now even that they want to sell, no one wants to buy from them. What point does it make if your property is "valued" at x amount when no one is willing to buy at x?