WSJ article – Is Housing Undervalued?

[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.

[CostaMesa]

eye-pod – have you got anything better to contribute to the discussion than some weak personal attack towards me for merely pointing out the blatantly obvious? That you choose to characterize it as ‘political’ only underscores the silly yet nasty intent.

On topic…

I think comparisons to precious metals are somewhat silly. Once the specialty PGMs are taken out of the equation (Pd an Rh that both have unique industrial uses) then the average doubling of the precious metals in the last handful of years hardly compares to the quadrupling of housing values during the same time.

Lookup ‘Johnson-Matthey’ for the definition of the acronym.

[CostaMesa]

eye-pod – have you got anything better to contribute to the discussion than some weak personal attack towards me for merely pointing out the blatantly obvious? That you choose to characterize it as ‘political’ only underscores the silly yet nasty intent.

On topic…

I think comparisons to precious metals are somewhat silly. Once the specialty PGMs are taken out of the equation (Pd an Rh that both have unique industrial uses) then the average doubling of the precious metals in the last handful of years hardly compares to the quadrupling of housing values during the same time.

Lookup ‘Johnson-Matthey’ for the definition of the acronym.

[CostaMesa]

eye-pod – have you got anything better to contribute to the discussion than some weak personal attack towards me for merely pointing out the blatantly obvious? That you choose to characterize it as ‘political’ only underscores the silly yet nasty intent.

On topic…

I think comparisons to precious metals are somewhat silly. Once the specialty PGMs are taken out of the equation (Pd an Rh that both have unique industrial uses) then the average doubling of the precious metals in the last handful of years hardly compares to the quadrupling of housing values during the same time.

Lookup ‘Johnson-Matthey’ for the definition of the acronym.

[kewp]

I guess we can all look forward to 25% raises each year from now on? WOOHOO!!!!!

[kewp]

I guess we can all look forward to 25% raises each year from now on? WOOHOO!!!!!

[kewp]

I guess we can all look forward to 25% raises each year from now on? WOOHOO!!!!!

[kev374]

Author has lost his marbles, what baloney!

[kev374]

Author has lost his marbles, what baloney!

[kev374]

Author has lost his marbles, what baloney!

[(former)FormerSanDiegan]

I think most here would agree that the dollar has lost value relative to precious metals and other currencies during the last 7 years. I think the author is stretching this point to a ridiculous limit, however.

A valid point, though, is that tangible assets tend to appreciate significantly when currency declines. This includes precious metals, commodities and real estate.

[(former)FormerSanDiegan]

I think most here would agree that the dollar has lost value relative to precious metals and other currencies during the last 7 years. I think the author is stretching this point to a ridiculous limit, however.

A valid point, though, is that tangible assets tend to appreciate significantly when currency declines. This includes precious metals, commodities and real estate.

[(former)FormerSanDiegan]

I think most here would agree that the dollar has lost value relative to precious metals and other currencies during the last 7 years. I think the author is stretching this point to a ridiculous limit, however.

A valid point, though, is that tangible assets tend to appreciate significantly when currency declines. This includes precious metals, commodities and real estate.

[kev374]

A valid point, though, is that tangible assets tend to appreciate significantly when currency declines. This includes precious metals, commodities and real estate.

Yes, but demand for Real Estate is local for the most part and local demand is support by currency that is earned locally. If the dollar declines in value against other currencies it doesn’t mean there is simultaneous wage inflation which is what supports RE purchase fundamentals.

Infact, even though the dollar has been declining, wages have been stagnant. This doesn’t support Real Estate appreciation, which is directly correlated with local wages.

[kev374]

A valid point, though, is that tangible assets tend to appreciate significantly when currency declines. This includes precious metals, commodities and real estate.

Yes, but demand for Real Estate is local for the most part and local demand is support by currency that is earned locally. If the dollar declines in value against other currencies it doesn’t mean there is simultaneous wage inflation which is what supports RE purchase fundamentals.

Infact, even though the dollar has been declining, wages have been stagnant. This doesn’t support Real Estate appreciation, which is directly correlated with local wages.

[Author]

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