How to tell where the price of your house is headed

examiner.com ^ | 11/02/10 | Gil Guignat

[SGW]

There is an interesting study that has been done back to the 1930’s. It has to do with the median price of a house divided by the price of gold. Whenever that price reaches 100 we reach a bottom.

( SEE GRAPH TOP LEFT. DOUBLE CLICK ON THE PICTURE IF YOU NEED IT LARGER)

Since Phoenix has been one of the hardest hit places in terms of housing prices, you’ll find this a very interesting exercise.

[SGW]

This is a very interesting study because there is over 100 years of data. Could be valuable.

[z3n]

"Before we site this study, let’s cover a few basics. This will allow you to tell where the value of your residential real estate is headed..." Do they have any credibility after the third word in the article?

[DariusBane]

No worries... They DID!

http://www.examiner.com/conservative-in-phoenix/how-to-tell-where-the-price-of-your-house-is-headed

Glad I could help!

[DariusBane]

No worries... They DID!

http://www.examiner.com/conservative-in-phoenix/how-to-tell-where-the-price-of-your-house-is-headed

Glad I could help!

[Fixit]

The problem isn't failing to link to the study.

The problem would be in taking financial advice from a writer who doesn't know (and apparently whose editor also does not know) the difference between cite and site.

[Hang'emAll]

At $217,983 gold would have to rise to roughly $2200 per ounce. The odds of that happening are 100%.....

I guess I should buy gold with those odds I can’t loose.

[DariusBane]

Hey, lighten Up!

That was so damn funny I posted it TWICE!

Once wasn’t enough!

[2001convSVT]

So the bottom line is that the median home price ($220k) should be equal to 100 ozs of gold. Right now the ratio is about 160 so gold must rise to $2,200 or the house must decrease by $80k. With the way the Fed is creating paper money I would bet that gold rises.

[Yo-Yo]

The author is a nut. Looking at that graph, I plot a straight line showing that today the median price of a house over the price of gold should be around 300, and we're below that figure now.

[Dr. Sivana]

At $217,983 gold would have to rise to roughly $2200 per ounce.

Alternatively, the median price of the house might go down to $100,000, so you might not win.

[Nam Vet]

Actually, I believe the ratios at the top/bottom will be much different this go-around. Last time it was about 100 gold ounces for a median home or 816 ounces of silver for the same home.
This is about (today's prices) $135,670 in gold OR $20,300 in silver. Can you see how relatively CHEAP silver is? It WILL be $30 minimum up to $50 per ounce by Jan first. JMHO

Personally, I believe that this time around it will take much less precious metals to purchase that home this time around. Silver is MUCH scarcer than ever before, and, most importantly, there are MILLIONS more in the world able to buy it. The Chinese government is pushing their citizenry to buy and even advertising it heavily.

Nam Vet

[goat granny]

I think the time to buy gold is when it was at 400 dollars an ounce...back in 1980s.

[Neidermeyer]

I see it quite simply that housing tracks inflation and gold is an inflation hedge .. of course they relate.

[jiggyboy]

Goldbug ping

Mail me to get on or off the Free Republic Goldbug Ping List.

p.s. "My" persistent craigslist spammer is back on the job -- 12 posts today after he saw that we erased nearly all of his over-posts last week. THANK YOU to everybody who flagged him before, but may I make another humble request to "flag as spam / overpost" again if you have a couple of seconds.

[misanthrope]

Interestingly, the word “site” is now “sight”.

Hmm.

[GOPJ]

thanks for the ping