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.
10 comments:
Sort of. I was saying for a while that the crash would be quicker here because the banking industry would already be weakened from the US crash (rather than occur AFTER the crash as in the US) and that the psychology would change quicker.
Even so, I didn't think 20% in one year.
I'm so glad I never got involved in the madness, bought my house in 95 and have no intention of moving.
ahem ...
C@W modestly (!) feel we did OK, on this and other fronts
Just another 30 points required to get it back to 2003 (my personal "target" for the year).
Actually the real house price graph this time looks just as steep as it did last time (89- end90), and I was saying it would - the difference is that this time with low inflation, it sounds worse. But the net effect is the same. And 2010 will be as bad as 91was!
B. in C.
It will be a whole lot worse than '91 - I expected the bubble to burst about 2 or 3 years ago myself.
The bigger the bubble the bigger the bang - so expect major collapse of confidence of what remains of the UK economy in 2009... taking with it house prices !!!
Mark - I take your point - yes, the rise - a tripling of prices - is worse this time around, so the graph is both steeper on the way up and the way down.
B. in C.
I note that because Halifax measures from a 3-month average, their claim of a 16.2% drop in 2008 is a manipulation. Dec 2007 was £197,074; Dec 2008 was 159,896. That's a fall of 18.9%.
Add a few per cent for inflation, and we find the real house price drop is about 22%. In one year!!!
B. in C.
at least you're not in California...we're getting hosed big time!
how about a graph for the top 10 cities in the UK? Where were the house prices most inflated? Have they dropped proportionally in those regions?
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