Big Mistake: Bet Gone Wrong

Meanwhile, quickly rising US mortgage rates have put home sales to the lowest levels in 22 years. For good reason, people are being priced out of a real estate.

Two yrs ago, the 30 yr mortgage rate was 2.96% & the median existing-home price in the USA was $306k.

Today the 30 yr mortgage rate is 5.60% & the median existing-home price is $404k.

With a 20% down payment, that’s an 81% increase in monthly payment (from $1,026 to $1,855).

If we are ever to get back towards 2011 levels on this chart, silver and gold values will need to outperform real estate for years to come.

In the face of fiat US dollar strength this week, silver and #GoldBullion traded downward this past week.

The spot silver price closed just above $19 oz, while the spot gold price finished this week just over $1750 oz

The gold-silver ratio ballooned back up into the 90s to close this week.

For longer context on where the gold-silver ratio stands at the moment.

Silver bullion import figures out of India keep growing in size. Reports this week claim just over +263 million ounces of silver bullion will make their way into the world’s biggest silver-consuming nation.

Of course, we still have 1/3rd of the year 2022 remaining, so we shall see if these massive figures are accurate by Q1 2023.

For now, bullion buyers who have relatively strong fiat US dollars to spend do so while exhibiting strength and keeping spot prices at reasonable levels.

That is all for this SD Bullion Market Update, as always to you.

Take great care of yourselves and those you love.

Royalty-Free Music by Scott Buckley:

Scott Minerd, Big Mistake Buying Condo in Southern Florida 1980

Scott Minerd on Silver $500 oz by 2031

[winstonsmiths]

After the 2008 housing crash/bubble popping, took out all funds from a IRA. After falling by 40%, I had $15, 000 left after all fees etc. Used it to buy a house (FHA) in Orange County CA for $265, 000. Sold it in August 2022 for $631, 000! Netted $415, 000. I will buy another house with cash in another state, buy a newer vehicle. Will not let that fiat sit in a bank. I will put much of it into metals, primarily gold. All this in addition to what was already a nest egg built to last 25 years in retirement. That 15K turned into a 25+ bagger!

[falsefreedom]

The statement "Real estate always goes up" simply sounds a lot nicer to most than "The dollar always goes down".

[dexterdave]

Thanks James. As I listened to Scott Minard it brought up a bad memory for me as well. I bought a house in 1980 for $25, 000 and the day I closed, Paul Volker had raised the interest rate to 21%, I think. I bought the house thru the VA which gave me a 19% rate at close. I got out from under the house in 1986 when virtually no one was buying houses but God smiled on me and I threaded the needle. I haven't bought another piece of property, since. I didn't want to buy even then but my ex wife, who had designs of her idea of Americana. Long story. The point I'm trying to make is, I will not buy anything on being pressured ever again.
Even with price and premium fluctuations, I still view silver and precious metals as a constant.
See ya, James.

[silverscientists]

Just bought 53 oz of the 10th anniversary rounds!! 1 at spot plus this beautiful dip ....gotta love it

[jasonpaul]

Thanks James. Always appreciate your updates.

[DBMac-jifr]

The real estate debate really should differentiate between residential and commercial real estate. I own my home, I love owning and am not too concerned about the value as comps will do what they do while I pay down the debt at 3%. I own apartments too where the value is derived from the rents and I don't see those cratering in the face of printing and owning in a state where sane people are flooding into.

[DJ_QUANT]

All of the fools buying RE now will learn the same lesson the hard way during the next 10 years!

[Endthefedplease]

Great content James, thank you so much

[sanpedrosilver]

I bought low, medium and high. Just waiting for the day Au/Ag get expensive again. Want to buy my retirement home abroad

[lehisilver]

So did he sell his house for more money and the dollar was devalued even more than it was in the 1980s ??? I'm missing something in this little story

[yanivpete]

To paraphrase, hard precious metals markets make strong pm investors

[jamesreal]

JUST GOT MY AG 10 YR ANNIVERSARY SD ROUND! I LOVE EM THANKS JAMES AND SD BULLION TEAM

[leeroykincaid]

If you have trouble getting to sleep, watch this interview.

[hoytstill]

He may have lost money, but, he would have lost more paying rent. Home prices did not fall, there was just very little buying and selling. And by 1987, rates were down and homes were moving again and they had appreciated. I was in the real estate business in 1980. Interest rates went from 9% to a max of about 15%. However, very few houses were bought and sold after 1980. Just like today, you kept your home with the 9% mortgage because selling it to buy a new home paying 3-5% more made no sense.

[t.properties]

"The intelligent investor will not do his buying and selling solely on the basis of recommendations received from a financial service. Once this point is established, the role of the financial service becomes the useful one of supplying information and offering suggestions."
-Benjamin Graham

Scott's last statement reminded me of this.

[jeffreysmith]

Always good to learn from your early, small mistakes, so that you can become successful when the stakes are much higher. Always embrace the learning.

[thomasmanning]

Rates are going higher yet most homeowners with very large mortgages are hopeful that they're in a safe and sound investment. They are NOT.

[josephpurdy]

How many times have you seen 231 toz of gold in a single stack? How many rows of single family homes do you see in the suburbs? Maybe you can argue the demand for houses is much higher than, the demand for gold. But, what you cannot deny is the supply of houses largely outweighs that of gold.

[BlueWaterSTAX]

What a valuable lesson. History teaches us that humans don't learn from history. Lol. Thanks again SD Bullion. We appreciate everything. What a deal on the SD Bullion round. 👍😀🏅🥈🏅🥈

[achilles]

Real estate hands down out performs any metals. Crypto too and even used cars.