A rapidly falling market is a terrible thing. With every percentage point drop in prices, wealth vanishes. It doesn’t matter whether we’re talking about stocks, real estate, business inventory, or Grandpa’s coin collection, the value drops. Equity drops. You don’t even have to sell at the lower price to feel the effect. You feel less rich, poorer, and insecure.
Those who desperately want to sell or refinance feel the loss. Homeowners who think their home’s equity would be a resource for retirement or putting the kids through college suddenly don’t have a plan. The loss runs deep, and it takes an emotional toll.
With the changing market, our clients changed. They became afraid. With their fear came anger, remorse, denial, mourning, and dozens of other negative emotions that can be lumped into one word: distress. People in the market became contentious and full of doubt. Buyers were no better off than sellers. They worried that buying too soon would cause them an immediate loss if the market tumbled further.