Since this is the first post of the New Year, we should start with an old friend – the Halifax house price index. Since its peak in autumn 2007, house prices are down 21 percent. Prices are now back to a level previously recorded in the early summer of 2004.
Who would have imagined a 20 percent fall in little over a year? Actually, there were quite a few people who said that prices could fall that far. However, the speed of the decline was quite unforeseeable. While a decline of this magnitude was inevitable, the momentum of the housing crash has taken everyone by surprise.