Wednesday, April 28, 2010

Home Prices Vs. Gold

On April 23, chartoftheday.com had an interesting chart, shown below, that compares the median home price vs. the price of Gold:




Traditionally, houses have been viewed as "hard assets." However, as one can see above, their recent (from a long-term historical perspective) price pattern seems more geared to that of a "paper asset" - i.e. strong performance during the '80s and '90s, while significantly underperforming Gold for roughly 7 years.

There are many other observations and interpretations that can be made from this ratio as well. It certainly "frames" home prices in a different light, especially from an investment standpoint.

Going forward, it will be interesting to see how this ratio evolves...

________


SPX at 1189.38 as this post is written

No comments:

Post a Comment