Well, it’s a new year, and time for our first collected news chum. So, without further adieu…
- From the “Housing Crisis: Lies, Damn Lies, and Statistics” Department: A few interesting housing tidbits from the LA Times. You thought it was bad where you live… Consider our poor president. Over the last three years the president’s home and home office has lost nearly a quarter of its value. In the last month alone the value dropped almost $4 million. The 132-room mansion — 16 bedrooms and 35 bathrooms on 18 acres in the heart of the nation’s capital —was worth $331.5 million at the top of the housing boom, according to Zillow, the online real estate marketplace. But the latest “Zestimate” puts the price tag at a mere $253.1 million. That’s a 23.6% decline in value. But then again, it is still doing better than gold. What’s that, you say? Gold is at an all time high. That may be, if you considered just the last nine years or so. But if you go back to 1980, a house would have been the better place to park your money. Not counting transaction fees and holding costs, if you bought an ounce of gold in 1980 and held it until October, you would be ahead 95.5%. But if you adjust for inflation, you would have lost almost one-third of your investment. However,if you had purchased a median-priced home in January 1980 and sold it for the median price in October 2010, you would have notched a 252% gain, again assuming no transaction fees or holding costs. This is despite a 23% decline in values since 2006. Further, unlike gold, you would have been able to live in the property, reap the tax deductions for mortgage interest and property taxes, and realize a nontaxable gain of up to $500,000 when the house was sold. Even after adjusting for inflation, housing values are still 18.6% to the good over the 30-year period.
- From the “Cleaning Up” Department: Live in New York and want to increase the value of your housing. Get a washer and dryer. According to the NY Times, laundry centers increase the value of housing in Manhatten—in face, a washing machine can add as much as 5 percent to an apartment’s price tag.
- From the “Signing Out” Department: A nice article from USA Today on the revitalization of the Neon Boneyard in Las Vegas. Those who go to Vegas today don’t understand the neon Vegas of the 1950s-1970s. The signs of the hotels were spectacular, and weren’t just large screen TVs. This is the place that has them preserved. In a related story, the LA Times/Chicago Tribune has a story on “Bugsy Siegel’s Las Vegas”.
- From the “Unanticipated Side Effects” Department: This was covered in a This American Life around the time of the Obamacare discussions: how drug company discount programs can actually increase costs. These are the programs that help you with the co-pays for the more expensive specialty drugs. By using them, it makes it less expensive for the consumer to use more expensive drugs, increasing the cost to the insurance company. It’s an interesting situation: people need these drugs to help them, and the drug companies help, but they also hurt the overall drug insurance side of the equation. Of course, they don’t do the sensible thing, like reduce the actual price of the drug. In a similar vein (pauses for groan), here’s a story about the unanticipated costs after weight loss surgery.
- From the “Going for the Special Effects” Department: Here’s an interesting opinion piece from the family that produced the notorious flop, “Via Galactica”. They blame the failure on the focus on the spectacular, with a lack of focus on the story. They intend their post as a cautionary tale for the producers of “Spiderman: Turn Off The Dark”,