Homeowners who failed to sell in 2021 are feeling excruciating pain these days, wishing they had sold when the market was red hot. And so are the homeowners who sold in 2019 and missed out on the post pandemic price spikes. And what about the buyers who purchased in the past couple of years, lamenting that they bought at the market's peak?
Here are some random thoughts
1. It is impossible to time markets perfectly. Most of the time when that happens, it is simply dumb luck.
2. Did you live in a home you love, or buy a home you love? Did you use and enjoy the home, and did it meet your needs? Assuming so, stop whining.
3. Did you choose to sell or not sell, or to buy, to speculate? Or were you more concerned about investing in your lifestyle and long-term future?
4. Generating a "loss" on what you might have gained if you sold at peak, or less of a gain you could have achieved had you sold earlier, is very different from generating a loss from what you paid. Some of those losses are merely lamenting greed, or what-could-have-been.
5. Knee jerk, follow-the-crowd buying and panic selling never end well.
6. We do not always "win". Sometimes we need to take a loss and move on. Taking a loss when all assets are discounted affords an opportunity to redirect capital to take advantage of future upside. Cashing out on a home right now and placing the proceeds in deeply discounted equity markets could produce more than simple recovery on losses. Similarly, purchasing another property now which is selling at a discount may well net you more. And upsizing in a down market also nets you more.
7. You only generate a loss or a gain when you sell. All other losses and gains are on paper and hypothetical.
8. Remind yourself that by selling now, even at a smaller profit, you benefited from additional enjoyment of your home, additional tax benefits of home ownership and less capital gains taxes. A half empty glass is also half full.
9. What may have been a market peak yesterday will be less of a peak tomorrow,
Do you really need to sell or buy now at a loss? Assuming the options are renting, staying put, living with friends and relatives, living at a vacation home, and commuting to the office - which will be best? The answers are different for everyone. Whatever you do, do not beat yourself up. It will all be fine.