{"id":14472,"date":"2011-04-19T15:59:19","date_gmt":"2011-04-19T22:59:19","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=14472"},"modified":"2011-04-19T16:03:43","modified_gmt":"2011-04-19T23:03:43","slug":"until-there-is-a-brokerage-counter-at-wal-mart-there-is-no-real-estate-bubble","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14472\/until-there-is-a-brokerage-counter-at-wal-mart-there-is-no-real-estate-bubble\/","title":{"rendered":"Until there is a brokerage counter at Wal-Mart, there is no real estate bubble"},"content":{"rendered":"

Ever wonder about the relationship between gold and real estate?<\/strong><\/p>\n

Jim Klein got me to thinking about a “store of wealth”, when I postulated that there is no gold bubble<\/a>:<\/p>\n

I think people can get snookered into thinking it\u2019s a great \u201cinvestment.\u201d It\u2019s protection, it\u2019s barter; it\u2019s a store of wealth. To me, that\u2019s not what \u201cinvestment\u201d means, which is usually about income. I believe that in actual inflation periods, gold tends to appreciate on the low side, particularly when compared with many other assets. It does much better \/anticipating\/ inflation, as now.<\/p><\/blockquote>\n

I remembered hearing that term before, over on Seeking Alpha<\/a>:<\/p>\n

Gold and Real Estate have historically been the two ways to store real value as they are as real assets as you get. So what happens when the value of one real asset is artificially manipulated? We all know by now what caused the bubble in real estate, but, at the height of the bubble it was unknown to the market that it was a bubble on the verge of bursting<\/p><\/blockquote>\n

Real estate does<\/strong><\/em> have income-producing value though, as Sean Purcell pointed out to us years ago<\/a>.\u00a0 Also, the median-priced home is larger today than it was 40 years ago, because of change in retail demand.\u00a0 Still, for fun, let’s compare the median price of a single-family home, in August, 1971 ($25,300) to the price of a single-family home, in February, 2011 ($202,100)<\/a>, in ounces of gold:<\/p>\n

On August 1, 1971, the price of gold was pegged at $35\/oz so it would have taken 722 ounces of gold to purchase a median-priced, single-family home.\u00a0 Two weeks later, The United States terminated its participation in The Bretton Woods Agreement<\/a>, creating a fiat currency.<\/p>\n

At the end of February, 2011, you might have paid $1,400\/oz for gold<\/a>.\u00a0 You could purchase a median-priced, single family home then for 144 ounces of gold, about one-fifth the cost (in gold), from 1971.<\/p>\n

What I’m missing here is the net operating income you would have derived from that single-family home, over the 40-year period.\u00a0 I’d have to know Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Ever wonder about the relationship between gold and real estate? Jim Klein got me to thinking about a “store of wealth”, when I postulated that there is no gold bubble: I think people can get snookered into thinking it\u2019s a great \u201cinvestment.\u201d It\u2019s protection, it\u2019s barter; it\u2019s a store of wealth. To me, that\u2019s not […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","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":""},"categories":[24,8,5],"tags":[],"class_list":{"0":"post-14472","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-egoism-in-action","7":"category-investment","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1962,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1962\/is-greenspan-to-blame-for-the-housing-crisis-and-if-he-is-is-this-entirely-a-bad-thing\/","url_meta":{"origin":14472,"position":0},"title":"Is Greenspan to Blame for the Housing Crisis? And, if he is, is this entirely a bad thing?","author":"Greg Swann","date":"September 23, 2007","format":false,"excerpt":"The second half of a US News dyscomium on Alan Greenspan's Fed:The global spread of capitalism has increased inflation-dampening competition throughout the world and allowed investors to accept lower yields when investing in bonds. What's more, globalization has boosted incomes, in Asia and beyond. That has expanded the pool of\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14492,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14492\/the-stick-the-carrot-and-the-men-behind-the-curtain\/","url_meta":{"origin":14472,"position":1},"title":"The Stick, the Carrot, and The Men Behind the Curtain","author":"Brian Brady","date":"April 27, 2011","format":false,"excerpt":"Monday, I talked about how real estate is better described as a store of value rather than an investment, referencing the work Reason's Anthony Randazzo published.\u00a0 Randazzo really hit it out of the park because he showed, without a doubt, how the residential real estate bubble started right after 1992.\u00a0\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1162,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1162\/health-wealth-population-the-internet-and-more-wealth-these-folks-are-going-to-need-a-place-to-live\/","url_meta":{"origin":14472,"position":2},"title":"Health, wealth, population, the internet — and more wealth: These folks are going to need a place to live . . .","author":"Greg Swann","date":"March 17, 2007","format":false,"excerpt":"During the boom, I wondered if the results we were seeing might have been fed by a reinterpretation of tax laws -- deductibility of leveraged interest, the owner-occupant capital gains exclusion, the IRS Section 1031 tax-deferred exchange, accelerated depreciation of real estate related chattel assets, etc. In other words, were\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14488,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14488\/housing-might-not-be-a-good-investment-but-its-not-a-bad-hedge-against-inflation\/","url_meta":{"origin":14472,"position":3},"title":"Housing Might Not Be a Good “Investment” But It’s Not a Bad Hedge Against Inflation","author":"Brian Brady","date":"April 26, 2011","format":false,"excerpt":"Debra and I had the good fortune to met Anthony Randazzo at a Reason Foundation dinner last week.\u00a0 Mr. Randazzo published an article today, about real estate as a \"store of value\" (which was consistent with what we've been talking about here on BloodhoundBlog). Few people will dispute that more\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16209,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/16209\/americans-will-downsize-and-live-multigenerationally-in-order-to-offset-the-fraud-they-know-exists-in-real-estate-until-there-is-wage-growth-and-that-could-be-years-or-decades-away-people-will-n\/","url_meta":{"origin":14472,"position":4},"title":"“Americans will downsize and live multigenerationally, in order to offset the fraud they know exists in real estate. Until there is wage growth, and that could be years or decades away, people will not trust any upward movement in real estate values.”","author":"Greg Swann","date":"September 27, 2012","format":false,"excerpt":"A searing indictment of The Bernanking System in Business Insider:Once people start to come out of negative equity, even more of them will sell and try to get out from under the cloud they are under. So, the housing bubble orchestrated by the Fed and by the hedge funds and\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14429,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14429\/when-wal-mart-has-a-gold-coin-section-in-the-jewelry-department\/","url_meta":{"origin":14472,"position":5},"title":"“When Wal-Mart has a gold coin section in the jewelry department…","author":"Brian Brady","date":"April 17, 2011","format":false,"excerpt":"...then we can start talking about a possible bubble in gold.\"--Gary North, on LewRockwell.com Gold is an investment asset. It therefore will not become popular short of an economic collapse \u2013 hyperinflation followed by a depression. The average person owns no gold coins, nor will he anytime soon. Where would\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/14472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=14472"}],"version-history":[{"count":3,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/14472\/revisions"}],"predecessor-version":[{"id":14474,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/14472\/revisions\/14474"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=14472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=14472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=14472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}