House prices in gold (updated, longer series)

[jimmygu3]

Re: House prices in gold (updated, longer series)

I posted this graph a while ago, and I think someone else posted something similar, but now I have history back to 1952. There is a gap where Bretton Woods broke down where I could not find the Sterling price of gold. Note the current bubble is far, far worse than the 60's-70's and we are due some serious pain.
There is still some way to go, but a large correction already. Long-term 'normality' seems to be about 120.

As I have said many times, US median house size has doubled since 1950. Comparing an ever-growing house to a static ounce of gold is like comparing a 1200sf house to smaller and smaller gold coins. The only reasonable metric I can see is gold grams per square foot (gg/sf), as shown in my chart below. It gives the best idea of what that 1200sf 1950's ranch would go for over the last half century, rather than comparing apples and bigger apples. We are below the 1930s now, about to dip below the 1980 century low of 1.8 gg/sf.



As for your observation about 120 oz / house, today that would be $108k, a price for which you can buy a nice 1950's ranch in most of the country. (OK, not in the best areas of big cities or in bubble markets, but a lot of places).

Jimmy

[Slimprofits]

Re: House prices in gold (updated, longer series)

I saved MacKay's chart as a .pdf. It is attached to this post.

If he wants me to remove this post, I will.

[zoog]

Re: House prices in gold (updated, longer series)

It was Charles McKay. I tried looking for it (briefly) but without success.

I think whatever image hosting he was using no longer has the link active, same thing happened to mine that I posted back in February or so.

So I rummaged around and dug out my chart for the US, annual data 1900 - 2007. No interesting annotations or multiple centuries to look at but, here it is.

[Andreuccio]

Re: House prices in gold (updated, longer series)

Someone's (maybe Charles McKay?) has a similar chart that goes back a few centuries IIRC. And it's annotated with a lot of interesting detail as well.

I believe there's a recurring low point where roughly 100oz will buy an average American home.

It was Charles McKay. I tried looking for it (briefly) but without success.

[WDCRob]

Re: House prices in gold (updated, longer series)

Someone's (maybe Charles McKay?) has a similar chart that goes back a few centuries IIRC. And it's annotated with a lot of interesting detail as well.

I believe there's a recurring low point where roughly 100oz will buy an average American home.

[*T*]

Re: House prices in gold (updated, longer series)

I agree 120 is a bit arbitrary. However the ratio does seems to be comparable across nations. I'd be curious to see the Oz, Spanish, German and US data.

Re: House prices in gold (updated, longer series)

T why do you pick 120 as about normality? Do you have some maths behind the picture?
My guess is everyone looking at this graph can draw different lines on it.

As an observation, in these times, given the pressures that have built up in our societies and economies over a period of 40 years or more, anyone who draws straight line projections on these graphs is assuming far too much about the past turning into the future in a straight line.

[*T*]

I posted this graph a while ago, and I think someone else posted something similar, but now I have history back to 1952. There is a gap where Bretton Woods broke down where I could not find the Sterling price of gold. Note the current bubble is far, far worse than the 60's-70's and we are due some serious pain.
There is still some way to go, but a large correction already. Long-term 'normality' seems to be about 120.

Average UK house price vs. 1 oz gold

source: Nationwide house index, Bank of England