2003 to 2004. It also shows that house prices started to decline after the end
of 2005 to reach a bottom, or close to a bottom, in 2008–2009, signaling a
good market. It is also important tonote that it takes about seven to ten
years for home prices to start climbing and for a home’s owners to reap a
good profit on the sale. In general, 2009 home prices in terms of gold indi-
cate that it is a good time to start buying homes and financing the housing
industry. Of course, this data is based on general nationwide data. It is
recommended that specific data in specific markets should be used.
The same correlation can be depicted by looking at the price of a home
if we were to pay for it in terms of rice or wheat^29 (if the only product of a
community were rice or wheat). We will find that the same correlation
applies. The reader must be warned that these charts (Exhibits 5.7 and 5.8)
are presented here as a directional tool; they are meant to be used by deci-
sion makers to gauge the direction of trends in order to avoid participating
in a bubble that may result in significant loss of their investments. It is also
important to state that it is hoped that a full research effort be conducted
along these lines to refine the analysis which is admittedly presented here in
the form of the Art of Islamic Finance. One of the questions that needs to be
answered is: Why did the prices decline drastically, especially the price of
EXHIBIT 5.6 Price of U.S. homes in gold.
112 THE ART OF ISLAMIC BANKING AND FINANCE