US Home Prices
This chart shows the Case Shiller home price index in US Dollars and in grams of gold. Both indices use the price of a home in January, 2000 as 100. Prices in gold and dollars tracked pretty well until 2001, when the dollar began to collapse, taking the true value of homes down with it.
At first, the drop in the dollar simply offset the apparent rise in home prices, and prices in gold worked sideways until 2006. But when home prices began to fall in dollar terms, and dollars were themselves falling in value, the double-whammy pushed true home prices down to levels not seen since the late 1980s. In fact, they set a new record, the lowest level since the index was first published. This means that most homes purchased in the last 20 years are now worth less than the original purchase price, even if they show gains of 100%, 200%, or more, in dollar terms.
You should also notice that the most recent uptick in dollar prices is more than offset by the decline in the value of the dollar, the unavoidable side-effect of government bailouts and interest rate price fixing by the Fed.
The last chart shows a synthetic index built from several different sets of home price data complied by Shiller for his book Irrational Exuberance. Looking back to 1890, we can see that home prices today are lower than they were during the Great Depression, and are approachng their all-time lows.
Case-Shiller Home Price Index, seasonally adjusted, in USD and gold:
Case-Shiller Home Price Index
click on the chart to download a pdf
Shiller's Long Term Home Price Index
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Greetings,
The USPS seems to be raising prices frequently. We have another one cent postage increase coming 5/12/08. Can you post a chart for US Postage priced-in-gold?
Ah homes. Everyone needs a place to live. Can you show rent vs. gold? And can you show a chart back to 1900? For those of us who still own our house, or portions of it, is it better to hold or sell at this point? How long until inflation catches up and effects house prices? A house is an asset and as such may be effected by the inevitable inflation. Also, population is not declining. The question is when real prices (priced in gold) will increase. Or, maybe someday houses will have a gold asking price? A historical chart, even including the 70s may be helpful.
thanks!
Additional comment. i think I may have answered my own question by looking at your gold vs DJIA chart. I would say USD in gold would stop rising (achieving parity if USD still exists) round about 2030- rising steadily for the next 20 years (if you use 1930-1980 pattern as precedent). After which case the real value of the stock market increases, feeding real real estate values. Though very rough it seems that real estate in gold price would begin to recover 2030-2040. How depressing really. In the meantime, at least we have a place to live (or our children/grandchildren do.) A chart from 1900ish showing DJIA, gold and property prices would be most illuminating. Many thanks.
Could you update the US Home Prices chart using Case Shiller data all the way back to 1890? The data is available at http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/table I'd love to see the historic data in terms of gold. Thanks for the great site.
@Michael Hendricks: Excellent idea, Michael! Thanks for the link to Shiller's long term data. I've added a chart going back to 1890 to this page. Fascinating to see just how low home prices really are!
This chart is a little skewed if you ask me. I live in Texas and granted we were in the oil boom but I bought my home for 73k in 1979. I can't remember but gold was around 500 at that time I guess. I believe i remember the price I paid was exactly the median for US home prices. If all those foggy memories are correct, the I paid in the neighborhood of 140 ounces for my home. That does not jive with the above chart very well. Now it's probably worth 75 ounces, so much for getting rich buying houses.
I guess this means gold is at an all-time high, when priced in US residential real estate.
One long term chart is worth more than one hundred opinions. The chart showing housing prices in gold since 1890 is fantastic, great work. It seems to stop in early 2011, I bet the next update will show that housing in gold terms is already cheaper than it has been in the entire 121 year chart! For me the choice is clear, while I understand the reasons for the demand for gold, for safety and income, I prefer bricks, dirt and tenants.