Oren didn't answer me when I called to ask how the sale was going. He answered three days later, in a short message: “I think I missed the train. Maybe we should talk.”
I had known Oren for almost a decade. He entered the Hungarian market early, even before it was a trend among Israeli developers. He acquired several parcels of land on the outskirts of Budapest, with a clear plan: to advance building plans, obtain permits, and build residential projects that would sell both to locals and to Israeli investors. He worked it correctly at first. He advanced the plans with the authorities, received approvals, built a sales model. The Hungarian market was rising, and he planned to build within two to three years.
Then COVID arrived. Planning work stopped, meetings with the authorities moved to Zoom and took months instead of weeks, and investors who had been interested disappeared. Oren waited. “It's temporary,” he told me then. “It will pass.”
It passed, but not without a mark. According to official data, real housing prices in Hungary fell by about 8.5% in 2022, and the number of transactions in the market plunged by about 24% in 2023; the market recovered only from the end of 2023 onward. Then the war in Ukraine broke out, too close geographically to Hungary, and foreign investor sentiment in the region was hit at exactly this sensitive time. Investors who were supposed to come in pulled back. Oren waited again. Then came changes in local regulation on foreign investment and construction, which required adjustments to the plans he already had. He waited out that, too.
At every step along the way, Oren's logic was reasonable. Each of the reasons that led him to postpone the decision was real and beyond his control. The problem was not in any single decision to wait a little longer. The problem was that he never stopped to ask himself: how long am I willing to wait in total, and what is the price of this waiting?
When he finally decided, after almost five years, that he wanted to exit the market and sell the land, he discovered two things at once. The first: the validity of the approved plans he had received at the beginning had expired. To sell land at full value, you need a valid plan that actually permits building, not an old plan that requires full renewal with the authorities - a process that takes time and costs money, and lowers the price a potential buyer is willing to pay. The second: the market had in fact recovered in the meantime, but not for him. The recovery that began at the end of 2023 came mainly in built, existing apartments, while construction and financing costs stayed high, so raw land with an expired plan, requiring additional investment before building could even begin, simply interested no one at the prices Oren remembered from the 2021 peak.
It took him another year to understand the gap, correct the price, and start a licensing renewal process in parallel with the sale itself. In the end he sold - at a significant loss relative to what he could have received had he decided to exit three years earlier, when the plans were still valid and before the delay accumulated.
I come back to this often because it isn't a market-timing mistake. Nobody controls the market. Oren's mistake was that he treated each postponement as “not a decision,” as if waiting were doing nothing. But waiting is a decision. It is a decision that time runs quietly, without your noticing, until it becomes more expensive than any other decision you could have made.
The question I would ask in your place
- Do I have plans, permits or approvals that are about to expire, and what happens to the property's value if that happens?
- How long am I letting external circumstances “sort themselves out” before I set myself a final decision point?
- Is the price I am asking today based on what the market is worth now, or on what it was worth when I decided to wait?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית