Currently on the reading table.

I remember reading Robert D. Putnam’s book Bowling Alone and was facilitated by how he captured the disintegrating cultural network that made America great in the past decade. I am very excited to read his latest work, The Upswing.

Today’s read.

Quoting from the text: “Public debates are characterized not by deliberation on differing ideas, but by demonization of the other side.” That feels so true today, and it’s no way to live as one country.

“If I were starting now, I would have stayed in Boston” – Facebook founder Mark Zuckerberg

 

Have you had that thought?  If I only knew then…well you don’t have to be one of the youngest billionaires on the planet to have realize that you could have done something different.  What struck me is the REASON Mark Zuckerberg would have stayed in Boston; “If I were starting now I would do things very differently. I didn’t know anything. In Silicon Valley, you get this feeling that you have to be out here. But it’s not the only place to be. If I were starting now, I would have stayed in Boston. [Silicon Valley] is a little short-term focused and that bothers me.”  – That comment got me to thinking about how many of the ills that affect the National housing market are the result of Short-Term thinking.  (read the full post on TechCrunch)

During the first five years of the century, 2000 to 2005 the year over year gains in housing values grew at extra-normal rates.  Based upon the The S&P/Case-Shiller Home Price Indices 20 City Composite a single family home purchased in January 2000 for $1,000,000 would be worth 1.1239% more a year later, 1.364% more by January 2003 and by January 2005 that same home had increased in value by 1.7644%.  Home buyer became used to these gains in value and came to expect that whenever they purchased a home, the value of that home would increase – short-term thinking.  Let’s look at the second part of that decade 2006-2010.  In January 2006 that home purchased for $1,000,000 in 2000 had increased in value by 2.0244%, double the value in six years!   Looking at those numbers would compel a buyer to keep investing in, or take profits from their home.  However here is where the trend changes and from 2007 to 2010 the value of that property recedes from it’s high point so that by the end of the decade that same house was worth 1.4531% more than it was in 2000.  If a home buyer looks only at the 2006 -2010 year over year changes they will see a market declining and leveling out at a bottom and hence would not be compelled to purchase. Short-term changes moved in both upward and downward directions but Long-term the property held value and grew over the decade.