I think this is a general phenomenon in finance/valuation and I'm sure someone has studied it.
Even when the value of something has fallen (as measured by market comparables, ability to generate incomes like rent, etc) people become anchored to a valuation and think they'll get the price they want if they just hold out a little longer. There's something psychologically difficult about accepting that you aren't going to get the price you want for something; it requires an act of "letting go" that can be hard.
You see this all over the subprime crisis, banks had tons of toxic debt but didn't want to "book" their losses by selling at whatever the fair-market price was that day.
I'm reminded of that old saying from finance, "The market can stay irrational longer than you can stay solvent."
Large commercial landlords are usually fairly rational. They aren't as likely to fall victim to the sunk cost fallacy as individual homeowners are. More likely they're highly leveraged and gambling that prices will rise enough in a few years to deliver a huge return.
This phenomenon is a close cousin of the sunk-cost fallacy but it's not quite the same thing.
I'm talking about rationally assessing that the value of an asset has fallen, vs. sunk cost's "we've come this far..." - even if you're rational, it can be hard to sell and psychologically tolerate taking such a huge loss.
Even when the value of something has fallen (as measured by market comparables, ability to generate incomes like rent, etc) people become anchored to a valuation and think they'll get the price they want if they just hold out a little longer. There's something psychologically difficult about accepting that you aren't going to get the price you want for something; it requires an act of "letting go" that can be hard.
You see this all over the subprime crisis, banks had tons of toxic debt but didn't want to "book" their losses by selling at whatever the fair-market price was that day.
I'm reminded of that old saying from finance, "The market can stay irrational longer than you can stay solvent."