WSJ article – Is Housing Undervalued?

[eyePod]

CostaMesa, must I ALWAYS anticipate someone will make some cheap political comment? Anyway, this article is flawed simply because it can’t be understood.

[patientrenter]

Is this a lot of words just to say that the writer’s opinion is that inflation will be high enough in the (near) future to save nominal home prices from decreases?

Might be true… might not be… Your guess is as good as his.

Patient renter in OC

[patientrenter]

Is this a lot of words just to say that the writer’s opinion is that inflation will be high enough in the (near) future to save nominal home prices from decreases?

Might be true… might not be… Your guess is as good as his.

Patient renter in OC

[patientrenter]

Is this a lot of words just to say that the writer’s opinion is that inflation will be high enough in the (near) future to save nominal home prices from decreases?

Might be true… might not be… Your guess is as good as his.

Patient renter in OC

[bsrsharma]

His economic analysis makes as much sense as an Amway missionary’s conversion dump on “residual income” from the pyramid scheme.

[bsrsharma]

His economic analysis makes as much sense as an Amway missionary’s conversion dump on “residual income” from the pyramid scheme.

[bsrsharma]

His economic analysis makes as much sense as an Amway missionary’s conversion dump on “residual income” from the pyramid scheme.

[Arraya]

I can’t follow what he is saying. It just seems like a lot of nothing. Inflation is goint to take care of the affordibilty crisis in housing so don’t worry about it?

Anybody?

[Arraya]

I can’t follow what he is saying. It just seems like a lot of nothing. Inflation is goint to take care of the affordibilty crisis in housing so don’t worry about it?

Anybody?

[Arraya]

I can’t follow what he is saying. It just seems like a lot of nothing. Inflation is goint to take care of the affordibilty crisis in housing so don’t worry about it?

Anybody?

[people_are_smart]

Wow! I’m going out right now and buying a dozen homes!

[people_are_smart]

Wow! I’m going out right now and buying a dozen homes!

[people_are_smart]

Wow! I’m going out right now and buying a dozen homes!

[4runner]

His main point is that, for the past 30 years, the price of housing has generally been correlated with the prices of commodities (think oil, copper, lead, gold, pork bellies, etc.). In particular, over this time, the ratio of housing prices to an index of precious metals remains fairly constant. At present, the ratio is out of whack– precious metals have been increasing in price faster than housing– and he concludes that housing is underpriced.

I wouldn’t worry too much about his arguments. I think that much of the increase in precious metal prices over the last few years has been due to demand from overseas. Think of how much copper and silver China and India have been using.

However, I think that it is fair to say that there hasn’t been a similar demand from overseas for U.S. real estate. Hence his index is out of whack.

[4runner]

His main point is that, for the past 30 years, the price of housing has generally been correlated with the prices of commodities (think oil, copper, lead, gold, pork bellies, etc.). In particular, over this time, the ratio of housing prices to an index of precious metals remains fairly constant. At present, the ratio is out of whack– precious metals have been increasing in price faster than housing– and he concludes that housing is underpriced.

I wouldn’t worry too much about his arguments. I think that much of the increase in precious metal prices over the last few years has been due to demand from overseas. Think of how much copper and silver China and India have been using.

However, I think that it is fair to say that there hasn’t been a similar demand from overseas for U.S. real estate. Hence his index is out of whack.

[Author]

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