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Inflation is driving up the price of food, real estate prices are going down. Confused?

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The price of basic commodities continues to climb.  Corn, wheat, rice, sugar, oil are all going up significantly over the last 2 years and experts say this trend will continue.  Does that mean home prices will go up as well?  Unfortunately the answer is no in the short term.

With the American population aging we are passing our peak spending years of about 46 years old.  This leads to down sizing in homes and an over supply of yet to be absorbed homes by a slow buying rate.

Zillow expects house values to trend down past 2012 without projecting a bottom.  Part of the problem in South Carolina is the freeze on foreclosures.  The amount of homes behind on payments but not yet foreclosed on, called the shadow inventory, is getting enormous.  Add to that the amount of home owners who owe more than their house is worth and it appears there are even more coming down the line.  All this will put downward pressure on home values.

However, like any good investor will tell you, you don’t have to buy at the bottom and sell at the top to make money. Home prices have already come down about 15% in Spartanburg county.  Considering the alternative to buying is renting, an automatic loss, and suddenly buying a home today is not such a bad decision.  Almost always more important than WHEN you buy is HOW MUCH home you buy. Buying a home that fits your income and potential future income in critical to your financial safety.   Plan to be able to make your house payment on only one income and if the corporate hatchet man comes calling you will be financially alive to fight another day!

Here is a comparison of what food costs looked like over the last 30 years courtesy of Yahoo News.  Buy your next home considering what these costs will look like in the future.

 

Inflation has a way of making your everyday purchases look like little luxuries.

If you need proof, look no further than the Bureau of Labor Statistics’ latest report on consumer prices, which showed prices rose by a seasonally-adjusted 0.5% in March, with food and energy prices accounting for nearly three-quarters of the increase. All six categories of grocery store food groups saw increases during the month — a reading on fresh vegetables, for instance, climbed by 4.7% after jumping 6.7% in February, and a reading on meats, poultry, fish and eggs rose 1.1% after climbing 1.2% in February.

Rising prices may be top of mind for consumers right now, but they’re nothing new. Here’s a look at how the price tags on these 10 basic items have changed over the last three decades.


©Fox Business

1. Bread

What you pay now: $1.41 (average price for a pound of white bread)

What you paid …

Last year: $1.37
5 years ago: $1.08
10 years ago: $1.00
15 years ago: $0.88
20 years ago: $0.71
25 years ago: $0.57
30 years ago: $0.53


©Fox Business

2. Butter


What you pay now: $3.69 (average price for a pound of salted butter)

What you paid …

Last year: $3.13
5 years ago: $2.92
10 years ago: $3.30
15 years ago: $2.05
20 years ago: $1.94
25 years ago: $2.15
30 years ago: $1.99


©Fox Business

3. Eggs

What you pay now: $1.73 (average price for a dozen Grade-A eggs)

What you paid …

Last year: $1.66
5 years ago: $1.31
10 years ago: $0.93
15 years ago: $1.11
20 years ago: $0.99
25 years ago: $0.87
30 years ago: $0.90


©Getty Images

4. Steak

What you pay now: $4.46 (average price per pound of round USDA choice steak)

What you paid …

Last year: $4.28
5 years ago: $4.00
10 years ago: $3.50
15 years ago: $3.12
20 years ago: $3.41
25 years ago: $2.77
30 years ago: $2.86


©Alan Diaz/AP

5. Bananas

What you pay now: $0.62 (average price for a pound of bananas)

What you paid …

Last year: $0.58
5 years ago: $0.50
10 years ago: $0.51
15 years ago: $0.49
20 years ago: $0.48
25 years ago: $0.39
30 years ago: $0.36


©iStock photo

6. Potato Chips

What you pay now: $4.84 (average price for a 16-ounce bag)

What you paid …

Last year: $4.64
5 years ago: $3.47
10 years ago: $3.43
15 years ago: $3.06
20 years ago: $2.96
25 years ago: $2.68
30 years ago: $2.28


©Getty Images

7. Chocolate Chip Cookies

What you pay now: $3.22 (average price for a pound of chocolate chip cookies)

What you paid …

Last year: $3.25
5 years ago: $2.88
10 years ago: $2.44
15 years ago: $2.58
20 years ago: $2.69
25 years ago: $1.99
30 years ago: $1.73


©Keith Srakocic/AP

8. Bacon

What you pay now: $4.54 (average price for a pound of sliced bacon)

What you paid …

Last year: $4.11
5 years ago: $3.44
10 years ago: $3.26
15 years ago: $2.47
20 years ago: $2.22
25 years ago: $2.08
30 years ago: $1.67


©Getty Images

9. Tomatoes

What you pay now: $2.09 (average price for a pound of field-grown tomatoes)

What you paid …

Last year: $1.69
5 years ago: $1.73
10 years ago: $1.32
15 years ago: $1.21
20 years ago: $1.01
25 years ago: $0.82
30 years ago: $0.77


©Getty Images

10. Ice Cream

What you pay now: $4.92 (average price for a half gallon of ice cream)

What you paid …

Last year: $4.47
5 years ago: $3.75
10 years ago: $3.70
15 years ago: $2.86
20 years ago: $2.58
25 years ago: $2.36
30 years ago: $2.02

– Adam Samson contributed to this report.

Data courtesy of the U.S. Bureau of Labor Statistics. (“What you pay now” is the average price for March 2011; historical prices were calculated by averaging the monthly price data for the years noted.)