aahhh, the wonders of historical data, thats what all the quants with their phd's were looking at when they created all these CDO's in the USA... property prices in the states were completely uncorrelated on a state by state basis and there had never been a large country wide fall, thats why they could pool all that subprime waste together and the rating agencies would give it A+ ratings...
pity in the process of doing this they created a massive worldwide property bubble so that housing prices suddenly became highly correlated not just in the states but all around the developed world.....
30 year data doesn't mean anything in the current environment, for anything similar you have to go back to the great depression and look at what property did then, thats what central banks are afraid of, a massive deflationary spiral as bloated asset prices are collapsing all around the world and they are almost helpless as they reduce interest rates to negative figures....
