Was it only two years ago that property was still a miraculous money-making machine? All those bumbling halfwits on Sarah Beeny making a mint with a few B&Q light fittings and a pot of magnolia paint? It seems like a dream.
As we know, Labour's vaunted economic boom was built on a gigantic property bubble - the one that now has the ugly gash in its side and has already deflated by 20%. And we can see just how important that bubble was by looking at the official stats on Britain's wealth.
As at end-2007 (the most recent ONS data), national wealth stood at £7 trillion - around 5 times our annual GDP, or around £275,000 for every household in the land. Over the previous decade, it had increased by an astonishing 120% - ie it more than doubled. Which was nice.
But when you look more closely, it turns out that fully three-quarters of that increase came from residential property, which went up by 200%. By 2007 it comprised nearly two-thirds of our entire national wealth:
And there's no denying we acted accordingly. The construction industry boomed, as did the DIY industry. Estate agents did well, along with those suppliers of TV property porn. And as property owners we were also able to borrow extra spending money against the spiralling value of our homes.
This last effect - known as Home Equity Withdrawal (HEW) - was very powerful. Here's a chart of the Bank of England's stats on equity withdrawal as a percentage of households' post-tax income:
So in 2003, households were borrowing 7-8% of their net income against the value of their existing homes just to spend - the highest we have ever seen (the long-term average is 2.5%). In the decade to 2007 we borrowed £320bn in this way.
Now that's all fine and large, but we failed to remember a couple of key points.
First, unlike productive assets like factories, equipment, and infrastructure, or earning assets like financial investments, owning your own home generates no money income. When you borrow more against it, there is no corresponding earnings stream to service the debt. You certainly benefit from living in your home rent free, but you have to find the debt service payments out of your existing income.
Second, although you can always sell your home to pay off the debt, property transactions costs (Stamp Duty, estate agent fees etc) are high, it can be difficult to find a buyer (especially in a market downturn), and you've then got to find somewhere else to live. You don't generally have the option of selling a bit of your home, as you would with more liquid investments like unit trusts or gold bars.
And now that our wonderful money-machine has gone into reverse, we've also remembered something else - our homes are only ever worth what someone else will pay for them. And once prices reach levels where many new buyers are effectively priced out of the market, there's ultimately nothing supporting our housing "wealth" but thin air.
Tyler's fag packet says that the 20% fall in property prices we've already seen has wiped out getting on for £1 trillion of our national "wealth". We could easily see another £1 trillion disappear - all of it making us feel poorer and spend less.
True, the acceleration in inflation next year may push money prices back up again. But in real terms, go-go house prices and feelgood wealth will be a distant memory. No wonder Sarah B has moved into the lurve business.
PS So can Cam mend our broken economy? Murdoch's Wall Street Journal is somewhat less than optimistic: "Many Conservatives fear Mr. Cameron will become prime minister, only to be quickly exposed as a poll-driven "heir to Blair" who treads water a few years and then loses. What every American should understand is that this is not a test of "modern conservatism." It's a test only of whether an opposition that voices no coherent ideology can succeed when the ruling party stumbles." How the world changes. I well recall studying comparative political institutions 40 years ago, and learning that US party politics had no place for ideological differences. Our system was reckoned to be far superior, offering voters a proper choice (yes, I know - Heath vs Wislon - but since they were both Oxford men, they were superior by definition).