Stocks to Real Estate Ratio

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Interpretation

The Stocks to Real Estate ratio divides the S&P 500 index by the Case-Shiller Home Price Index. Just like Market Cap to GDP, the Stocks to Real Estate ratio has an interesting historical track record and crearly shows the stock market bubbles of 1929 and 1999.
The Case-Shiller Home Price Index seeks to measure the price of all existing single-family housing stock. Based on the pioneering research of Karl E. Case and Robert J. Shiller the index is generally considered the leading measure of U.S. residential real estate prices.

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Further Information

S&P 500 vs. the Case-Shiller Home Price Index

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Interpretation

This chart plots both the S&P 500 and the Case-Shiller Home Price Index. Over the long term the S&P 500 clearly outperforms residential property and appears to be more volatile. The housing bubble and subsequent stock market crash are clearly visible in the chart.


Page created by Will Beaufoy


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