{"id":24662,"date":"2012-11-08T09:00:23","date_gmt":"2012-11-08T17:00:23","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=24662"},"modified":"2012-11-08T09:37:18","modified_gmt":"2012-11-08T17:37:18","slug":"reader-question-home-prices-in-gold","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2012\/11\/08\/reader-question-home-prices-in-gold\/","title":{"rendered":"Reader Question: Home Prices in Gold?"},"content":{"rendered":"<p>A reader emailed me with a question about home prices compared to gold:<\/p>\n<blockquote><p>Any easy way for you to compare Case-Shiller home prices to gold?  I have a hunch prices have dropped much more dramatically than we realize, as our USD goes in the tank.<\/p>\n<p>Maybe <a href=\"http:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/\" title=\"Checking Up on Goldman's Bearish 2010 Two-Year Forecast\">Goldman&#8217;s 22% drop prediction<\/a> was closer if the nasty inflation wasn&#8217;t considered?<\/p><\/blockquote>\n<p>Since Case-Shiller is an index and doesn&#8217;t give us home prices in actual dollars, we can&#8217;t really compare Case-Shiller &#8220;home prices&#8221; to gold, but we can compare the median price.  I went back to my spreadsheet of historic King County median prices and added a column for the price of an ounce of gold, and this was the result:<\/p>\n<p style=\"margin: 5px auto; width: 600px; font-size: 0.8em; text-align: center;\"><a href=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/11\/Gold-King-Co-Home-Price_2012-Q3.png\" title=\"King County House Price in Gold\" rel=\"lightbox[24662]\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/11\/Gold-King-Co-Home-Price_2012-Q3-600x363.png\" style=\"border: 0;\" title=\"King County House Price in Gold - Click to enlarge\" alt=\"King County House Price in Gold\" width=\"600\" height=\"363\" \/><\/a><\/p>\n<p>Indeed, if all of your assets were in gold instead of US dollars, home prices fell a whopping 45% between June 2010 and February 2012&mdash;double Goldman Sachs&#8217; predicted drop.<\/p>\n<p>Pricing homes in gold also dramatically shifts the home price peak.  Seattle home prices peaked at just barely shy of 1,000 ounces of gold in Q2 2001, and fell to a low of 188.2 ounces of gold in Q1 2012&mdash;an 81% drop.<\/p>\n<p>For comparison, here&#8217;s a chart with homes priced in gold alongside inflation-adjusted home prices:<\/p>\n<p style=\"margin: 5px auto; width: 600px; font-size: 0.8em; text-align: center;\"><a href=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/11\/Gold-Inflation-King-Co-Home-Price_2012-Q3.png\" title=\"King County House Price in Gold\" rel=\"lightbox[24662]\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/11\/Gold-Inflation-King-Co-Home-Price_2012-Q3-600x363.png\" style=\"border: 0;\" title=\"King County House Price in Gold - Click to enlarge\" alt=\"King County House Price in Gold\" width=\"600\" height=\"363\" \/><\/a><\/p>\n<p>Inflation-adjusted home prices (in USD) peaked in the third quarter of 2007 and fell 38% from the peak to the bottom (so far) in the first quarter of this year.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A reader emailed me with a question about home prices compared to gold: Any easy way for you to compare Case-Shiller home prices to gold? I have a hunch prices have dropped much more dramatically than we realize, as our USD goes in the tank. Maybe Goldman&#8217;s 22% drop prediction was closer if the nasty&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[206,8,616],"tags":[28,803,177,6,228,101,227,200],"coauthors":[],"class_list":["post-24662","post","type-post","status-publish","format-standard","hentry","category-features","category-stats","category-counties","tag-affordability","tag-gold","tag-inflation","tag-nwmls","tag-original-research","tag-roller_coaster","tag-stair-step","tag-statistics"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Reader Question: Home Prices in Gold? \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2012\/11\/08\/reader-question-home-prices-in-gold\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Reader Question: Home Prices in Gold? \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"A reader emailed me with a question about home prices compared to gold: Any easy way for you to compare Case-Shiller home prices to gold? I have a hunch prices have dropped much more dramatically than we realize, as our USD goes in the tank. 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