Yes.

Its more obvious with something tangible. If I give you a $100 bill, and then you drop it down a drain, have you lost it? Of course you have.

The same is true for the value of assets though. You had the opportunity to cash it in by selling, you could have secured a loan against the value, you had the status of the wealth of owning a more expensive home. Those things have real implications on your life, and now you don't have them. It doesn't really matter that it's not actual cash.