Gold Vs Real Estate

Gold now fetches nearly $1400 an ounce.

I remember the last time gold was this high in real terms. It was the late 1970s and inflation was running rampant under Jimmy Carter. I remember a lot of books and talk about the end of the world as we knew it. Inflation was supposed to go and on.

Well, over the last 30 years, real estate has proved to be a better investment than gold.


Not counting transaction fees and holding costs, if you bought an ounce of gold in 1980 and held it until October, you would be ahead 95.5%, the economist figures. But if you adjust for inflation, you would have lost almost one-third of your investment.

“The value of gold in the last 30 years did not even keep up with inflation,” he said.

But if you had purchased a median-priced home in January 1980 and sold it for the median price in October 2010, Jones said, you would have notched a 252% gain, again assuming no transaction fees or holding costs. This is despite a 23% decline in values since 2006, he pointed out.

“And unlike gold, you would have been able to live in the property, reap the tax deductions for mortgage interest and property taxes, and [realize] a nontaxable gain of up to $500,000 when the house was sold,” Jones said.

Even after adjusting for inflation, housing values are still 18.6% to the good over the 30-year period, he said.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (, he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
This entry was posted in Real Estate and tagged , , , , , . Bookmark the permalink.