I have started a new project lately- assessing long-term price increases using a neutral currency (gold). Has the price of housing really gone up so much?
The easiest first project was an easy one- my first house, which I still own.
In June of 1985 it cost 54.3 ounces of gold.
Now it is valued at 116.7 ounces of gold.
So at least the price of a brick bungalow in Hapeville Georgia has a little more than doubled in price.
Would be interested in similar calculations from the rest of you in other parts of the country. You can reference the value of gold over the years at Gold Prices - 100 Year Historical Chart | MacroTrends
An interesting project would be how many gallons an ounce of gold would buy 30 years ago versus how many gallons an ounce would buy today.
Based on your analysis, owing a home is better preservation of wealth than owing gold?
While on the face, it appears true, but you forgot to account for the 40 years of property taxes, insurance, and maintenance that went into the house. My guess it is much less drastic when you add to your original basis of 54.3 oz all the extra that went into it for 40 years to get to the modern valuation. If you never painted, replaced a hot water heater, replaced the roof, etc, your home would not be worth 116.7 oz of gold today.
Gold does not require the same maintenance to maintain it’s value. I am by no means an investor of gold. I just don’t think you have an apples to apples comparison.
Many assets you own- cars, boats, ATVs- all need maintenance to maintain their value or increase it. In 1976 I bought my first car used for $1400 and could probably get $10,000 for it today. Along the way I have modified and improved it.
But with a residence one gets the value of living in it. As a car gives the benefit of transportation, and a boat recreation. An ingot of gold gives nothing except security.
Paper money is an unreliable measure of value. The point was that in my particular neighborhood, housing is more desirable now than before, so the house values have gone up.
The question is what metric is reliable to value assets? I want to do a comparison of how many gallons of gas the $50,000 would have bought in 1985 compared to what $280,000 will buy now.