How to construct a measure of house prices which best summarises changes in the market? That has always posed a real intellectual & practical challenge
But whatever solutions or compromises one adopts, one usually measures only the prices of houses which are actually sold
So in a falling market one would expect the recorded fall in prices to underestimate the true fall in the value of all existing properties, since those which cannot be sold at any price, or those which the owners cannot afford to sell at the price offered will not be included in the index
