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…
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My previous posts on Gold can be found under the “Gold” tag.
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SPX at 1189.38 as this post is written