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Chart Of The Day

REAL ESTATE: GOLD RATIO FALLS TO 30 YEAR LOW

After record bear and bull markets in both real estate and gold, the real estate:gold ratio might be telling us that we’ve reached an extreme trough in real estate prices. ┬áThe ratio hasn’t been this low in over 30 years (via Chart of the Day):

“Severely depressed real estate prices continue to be a concern for investors. For some perspective on the magnitude of the decline in home prices, today’s chart presents the median single-family home price divided by the price of one ounce of gold. This results in the home / gold ratio or the cost of the median single-family home in ounces of gold. For example, it currently takes a relatively low 105 ounces of gold to buy the median single-family home. This is dramatically less than the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down over 80% from its 2001 peak, remains well within the confines of a six-year accelerated downtrend and remains very near its 1980 trough.”

 

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