Well, I told someone just the other day that it would be a good investment habit to measure all prices in terms of gold, instead of inflated dollars, in order to make better sense of them.
So, I guess I need to pay attention here. However, I have a couple of concerns:
(1) the chart only goes back to 1970, approximately when we had high inflation and Nixon closing the gold window. Houses were ZOOMING in the early 1970s, there was a bit of a mania. The chart would be more meaningful if they took it back to, say, 1950. As it is I have to wonder what is on the back side of that 1970 peak.
(2) 1980-83 or so was a real estate WASTELAND. Interest rates for houses were nominally 21%+ ... but in reality you couldn't get one from a bank for any price. Now we have historic lows in interest rates but history says that if we even correct to 7-10 % mortgages, there will be a bloodbath in housing prices -- maybe another 30-50% drop?
(3) I also question the value of McMansions. I don't question the replacement cost; it would be higher than most current values. What I question is whether McMansions on postage stamp lots are a FAD -- like those stupid Hummers -- which are impractical to heat and maintain and are likely to be shunned like 1970's green shag carpet in the coming decades.
Still...all that said, this is data which I will try to keep in mind. It may be a good time to nibble at rentals...if I had the stomach for it anymore. More particularly, I think I will look to acreage, however.
As De observed I should get out of dollars.
I have come to realize that men are not born to be free. Liberty is a need felt by a small class of people whom nature has endowed with nobler minds than the mass of men. -Napoleon
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