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shared by Susan Cui on 23 May 11 - No Cached

house prices are falling, gold prices are rising, and therefore before you go ahead and buy a house, you should probably consider whether you’d be better off buying gold instead.
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house prices are falling, gold prices are rising, and therefore before you go ahead and buy a house, you should probably consider whether you’d be better off buying gold instead.
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homes are not an investment, they’re more of a consumption good.
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Maybe you’ve saved enough for a down payment. But should you bet your money on home prices, even with a tempting low-interest, fixed-rate mortgage? Or is it financially smarter to continue renting and invest the money in an asset that could appreciate for at least another few years?
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Being “financially smart” is not the same as investing in whichever asset gives you the highest return over some given time horizon.
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Essentially, Arvedlund is proposing an exotic relative-value trade here: she’s saying that houses will underperform gold, or that the price of a house in gold is going to go down rather than up.
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the price of a house in gold has gone down, and you would have been financially better off buying gold than taking that money and using it as a down-payment for a house.
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