What is the term for an asset that cannot be sold quickly without reducing its price?

The term "illiquid" refers to an asset that cannot be quickly sold or converted into cash without a significant loss in value. In real estate, for example, properties are often considered illiquid because they generally take time to sell, and market conditions can affect their price. If a property owner needs to sell quickly, they may have to reduce the price to attract buyers, which is the hallmark of illiquidity.

In contrast, a liquid asset is one that can be quickly sold at its market value, such as cash or readily tradable stocks. Equity, another term in real estate, refers to the ownership interest one has in a property after accounting for any debts, while a mortgage is a loan specifically used to purchase real estate. Hence, the understanding of "illiquid" is crucial in finance and real estate, as it highlights the challenges associated with quickly accessing cash from certain types of assets.