From the gas price in Chicago to real estate investment

This week I was in Chicago. It had been 24 years since the last time I visited the city in 1994. How time passed by! While the city may have gone through some changes, what drew my attention was the gas price.

The current gas price in Chicago was $3.37 per gallon. If compared to Hong Kong, it was not that bad. However when compared to my last visit here in 1994, it was high. In 1994, the gas price was about $1.11 per gallon. So it was like a 3 times increase! And I talked to a driver of Lyft, who was an immigrant from Brazil.  She said the current minimum wage in Chicago was $12 per hour. And the minimum wage in 1994 was $4.25. So it was almost a 3 times increase as well. Talk about inflation!

And I started thinking whether investing in real estate was a good hedge against inflation. According to the United States Census Bureau, the median and average sales prices of new homes sold in the United States in July this year are $328,700 and $394,300 respectively. During the same period in 1994, the median and average sales prices were $124,400 and $144,400. The increases are 2.64 times for the median sales price and 2.73 times for the average one. It seems like the housing has been catching up with inflation. Maybe investing in real estate is a safe choice to safeguard one against inflation.

References:

  1. Chicago gas price 1994:
  2. Chicago minimum wage: 1994 and 2018
  3. Median and Average Sales Prices of New Homes Sold in United States (historical data)

從芝加哥的汽油價格到房地產投資

時光飛逝,上一次到芝加哥已是一九九四年,時隔二十四年再訪,城市亦經歷了一些變遷,但讓我特別留意的卻是這裏的汽油價格。

芝加哥現時的汽油價格是每加侖3.37美元,如果和香港相比並不算昂貴,但相較一九九四年的1.11美元則上升三倍。我和一個來福車(Lyft)司機傾天,她是來自巴西的新移民,她告訴我現時芝加哥的最低工資是每小時12美元,而一九九四年的最低工資是4.25美元,同樣是接近三倍的升幅,通脹實在驚人。

這讓我想到投資房地產的抗通脹作用。根據美國人口普查局的統計,今年七月美國的新房銷售中位數價格和平均銷售價格分別為328,700美元和394,300美元,而一九九四年同時段的新房銷售中位數價格和平均銷售價格則為124,400美元和144,400美元,分別上漲2.64倍和2.73倍,近貼通脹數字。看來投資房地產可以是抗通脹的一個不錯的選擇。