decline in 14 years. This surplus created a huge and sustained downward pressure on house
prices. It was exacerbated by mortgage delinquencies and foreclosures. As the volume of
foreclosures rose, more houses were released onto the market, suppressing house prices further.
When the property was placed back on the market by the lender it was common for the
value of the property to have fallen. By early 2005 house prices had peaked and by 2006 they
had started to decline. However, they continued to fall on a year-on-year basis, the first time
this had occurred since the Great Depression. Average home sale prices nationwide fell 4.2%
in the 12 months to September 2007.13