The Good, The Bad & The Astonishing
A few weeks into the new year, and everyone is pretty busy catching up at work with less time to sift through the numerous articles written throughout the week. No worries. I’ve done the leg work for you. Here’s what stood out to me last week:
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The Good: December homes sales jumped in December by 12.3%. The increase put annual homes sales at 5.28 million, the highest level since June 2010 when the home tax buyer credit expired. The sales rate was much higher than expected, as experts had forecasted an annualized sales rate of 4.8 million homes. Also, the inventory of homes for sale fell to 3.56 million, a 4.2% decrease. That represents an 8.1 month supply of inventory, down from the 9.5 month supply in November.
The Bad: One million home starts in a year is often considered the benchmark for a good economy. Housing starts fell significantly short of that number in 2010 with a total of 587,000 starts. It was the second worse year since they started tracking the stat in 1959. Only 2009’s total of 554,000 was worse. According to the National Association of Home Builders, each housing start “creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes.”
The Astonishing: Buying a home is a big decision and some just aren’t ready to make that leap. Count Facebook’s founder Mark Zuckerberg among those. Zuckerberg recently rented a 3,800 square foot home in Palo Alto, CA. With an estimated net worth of around $14 billion, I think it’s safe to say he’s a renter by choice. I wonder if the homes owner ran a background check.
The Astonishing II: Remember in 2007 when we were checking out the values of our homes on Zillow on a pretty regular occasion? Good times. Well, it never occurred to me that you could Zillow the White House. Demonstrating that nothing is immune to the current downturn, the White House’s current value of around $250 million is down nearly 25% from it’s peak value of $330 million at the top of the housing market.