The
struggling real estate market remains a concern for investors. For some
perspective on 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 94 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 84% from its
2001 peak (to a level last seen in 1980) and remains well within the confines of
a six-year accelerated downtrend and continues to close in on its 1980
trough.
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