The Worst Case Scenario for the Real Estate Market

The US real estate makes up about 20% of global real estate values, and they are about 68% of real assets worldwide./nThis is big, big news./nThere's an interesting paper from Enrico Martina's, Garcia at the Dallas Fed, who took on precisely your question, how bad could this get? How much could this fall by?/nAnd he does is to look at the trajectory of housing prices over the recent cycle. And it's really dramatic between 2013 and 2022 US house prices in real terms as have risen by more than 60% by 61%./nAnd a very large amount of that surge has come really in the first quarter of 2020 and the second quarter of 2022./nAnd about 40% of that surge has happened in that period, so about 20%, 25% increase./nAnd I think that's the way in which we get a handle on what the worst case scenario might be.