The U.S. Agency FHFA ( Federal Housing Finance Agency ) signals the return of the price index of the U.S. residential real estate back to the level of it 10 years ago .
Whew!
Is the dark page in the history of subprime over ? Can REITs (real estate investment trusts) finally breathe ?
Though time is not ripe yet to undermine the morale of investors, it is interesting to recall the very foundations of the financial evaluation that precipitated the crisis of the subprimes.
The consensus at that time was that the price of U.S. residential real estate could not fall by more than 13%, the worst level observed ever (1993 in the North East).
It happened in the end that the magnitude of the decline did approach 20% hence the “house of cards” syndrom.
The prices have significantly increased in the recent past.
Will the next to come real estate crisis hurt even more?
The observed data being systematically crunched into the models of the statiticians, such scenario could easily become a matter of concern.
We definitely have to know who is the culprit.
His name ?
Gauss!
His accomplice ?
Laplace!
Their crime?
Having conspired for the establishment of the Laplace Gauss law!
Dominique F Pasquier