When viewing the real estate bubble in a slightly different light — measuring median home price in gold, not U.S. Dollars — some similarities emerge between the 2005-2010 housing crash versus the 1970s housing crash when interest rates were in the teens.
Image Credit: Chart of the Day
Granted, there are a few differences between the 1970s-1980s and 2000s, but financial markets have a curious way of repeating themselves, so it begs two interesting questions since this metric is calculated by median housing price per ounces of gold.
Not to sound like a gold bug and a real estate bear, but I’m thinking it will be a little of both since we’re still only halfway through the foreclosure crisis.