MONEY Sports

S.F. vs. K.C. By the Numbers: How the World Series Teams and Towns Match Up

San Francisco blows away its opponent in terms of global cachet and higher incomes, but Kansas City has barbecue—and more importantly, the Royals are favored to win it all.

The Kansas City Royals have skipped through the 2014 playoffs thus far without a loss, and sports betting operations named the team as a slight favorite to win the World Series over the San Francisco Giants. What’s particularly impressive about the Royals’ run is that the Giants’ payroll is more than 50% higher ($148 million versus the Royals’ $91 million).

The home markets of this year’s World Series contenders couldn’t be more different either. San Francisco is a hip, high-powered, and high-priced magnet for tech startups where the average home sells for close to $1 million, compared to a mere $186,000 for the typical house in Kansas City, a low-key, highly livable Midwestern hub famed for top-notch barbecue. Nonetheless, the secondary market price of World Series tickets for Kansas City home games is roughly 30% higher than games hosted by San Francisco. That somewhat unexpected disparity likely comes as a result of San Francisco owning the edge on most recent World Series title. Giants fans have been spoiled of late with championships in 2010 and 2012, whereas Royals’ fans have been waiting since 1985 for another World Series title.

With the Series starting tonight, click through the gallery above for a look at how the competitors match up, on and off the field.

MONEY buying a home

Why Firemen Are More Likely to Own a Home than Economists

Firefighters
Many public service workers such as firemen own their homes. Michael Dwyer—Alamy

A new study shows which professions are most- and least- likely to be homeowners. The results may surprise you.

What do firemen, police officers, and farmers have in common? They’re all more likely to own homes today than economists, jewelers, and accountants.

These are the results from a newly released study, done by Ancestry.com, looking at the relationship between profession and home ownership today and over time. The website teamed up with the University of Minnesota Population Center to analyze Census data between 1900 and 2012, creating a century-spanning log to show how ownership changed over the decades.

Looking at the most recent 2012 data, the research found that 79% of policemen and detectives own a home, yet only 64% of economists do. Farmers (81%) and firemen (84%) are in the top ten professions most likely to own a house, ranked above jobs like accountants (76%), and far higher than members of the armed forces (33%). Nationwide, the data shows 64% of the population owns their home.

Another surprising finding: the stereotype of the starving artist isn’t necessarily reflected in the data—at least for some industries. It turns out 63% percent of artists and art teachers own homes, as well as 62% of musicians and music teachers, 63% of authors, and 57% of entertainers. It’s not all roses for the artistic class, though. Just 37% of actors and actresses own a house, and that number sinks to 23% for dancers and dance teachers.

Toddy Godfrey, a senior executive at Ancestry.com, points out that there are both high and lower income professions on the most-likely-to own list, suggesting there isn’t a direct relationship between high wages and ownership. Typically lucrative professions like optometry tend to own, but so do lower-paid trade and public service workers.

“You look at some of the jobs on the top of the list, and they’re clientele based, or teachers, or others who are community rooted,” says Godfrey. He speculates that professions most likely to own “have a long-term connection to the community they live in.” That reasoning may also explain why tradesmen tend to buy instead of rent. Godfrey guesses many of these workers are tied to regional manufacturing, and therefore are more likely to set down roots.

Another trend the data suggests is that temporary and highly mobile workers tend to avoid homeownership. That could explain why so few military service members own houses, as they can be redeployed elsewhere and may choose to move once their service ends.

Finally, Godfrey highlights the fact that while ownership took a hit in the bust, the majority of Americans own their home. That’s up from 32% in 1900, though most of the growth happened pre-1960. “Maybe it’s come down a point in the last few years, but it’s held pretty steady at two thirds,” says Godfrey.That trend has been pretty constant.”

Top 10 Professions for Home Ownership in 2012

1. Optometrists: 90%

2. Toolmakers and Die Makers/Setters: 88%

3. Dentists: 87%

4. Power Station Operators: 87%

5. Forgemen and Hammermen: 84%

6. Inspectors: 84%

7. Firemen: 84%

8. Locomotive Engineers: 84%

9. Airplane Pilots and Navigators: 83%

10. Farmers: 81%

Bottom 10 Professions for Home Ownership in 2012

1. Dancers and Dance Teachers: 23%

2. Motion Picture Projectionists: 27%

3. Waiters and Waitresses: 27%

4. Counter and Fountain Workers: 28%

5. Members of the Armed Forces: 33%

6. Service Workers (except private households): 34%

7. Bartenders: 35%

8. Housekeepers and Cleaners: 35%

9. Cashiers: 36%

10. Cooks (except private households): 36%

TIME real estate

Hilton Selling Waldorf Astoria New York for $1.95B

Waldorf-Astoria Hotel
A general view of the exterior facade of the Waldorf-Astoria Hotel on March 27, 2013 in New York City. Ben Hider—Getty Images

(MCLEAN, Va.) — Hilton Worldwide is selling the Waldorf Astoria New York to Chinese insurance company Anbang Insurance Group Co. for $1.95 billion.

Hilton will continue to manage the storied hotel for the next 100 years as part of an agreement with Anbang.

The Waldorf Astoria New York has restaurants including Peacock Alley, Bull and Bear Prime Steakhouse and Oscar’s. The companies said Monday that the property will undergo a major renovation.

In March 1893, millionaire William Waldorf Astor opened the 13-story Waldorf Hotel. The Astoria Hotel opened four years later. The Waldorf Astoria New York, on Park Avenue in Manhattan, opened in 1931, according to the company’s website. At the time it was the largest hotel in the world. The hotel became an official New York City landmark in 1993.

Hilton Worldwide plans to use proceeds from the hotel’s sale to buy additional hotel assets in the U.S.

Hilton Worldwide Holdings Inc. was taken private in 2007 by private equity firm Blackstone Group LP. The hotel chain returned to public stock markets in December 2013. The McLean, Virginia, company is the world’s largest hotel group with more than 690,000 rooms across 93 countries and territories.

Aside from Waldorf Astoria Hotels & Resorts, its brands include Hilton Hotels & Resorts, DoubleTree by Hilton and Embassy Suites Hotels.

MONEY buying a home

How to Get Ready to Buy a Home

Checking your credit report and getting pre-approved for a mortgage are key, says Century 21 CEO Rick Davidson.

MONEY buying a home

The Surprising Feature Millennials Insist on When Buying a Home

Century 21 CEO Richard Davidson explains what young, single home buyers value in a new house.

MONEY retirement planning

Why Housing Costs Are the Biggest Threat to Your Retirement

House on top of cash
Caroline Purser—Getty Images

We should be looking at smaller "starter" homes as our "stay put" homes.

If there is one thing we have been trained to fear about retirement, it’s crippling medical bills that threaten to force us out of our homes and decimate our nest eggs. But it turns out that we might be better off worrying about our future housing expenses, as these costs are the single largest category of spending in retirement.

Moreover, the costs of maintaining a home remain stubbornly high as we age, according to a new analysis by the Employee Benefit Research Institute. For those 75 and older, housing expenses accounted for a whopping 43% of spending, even as other expenditures (except for health care) dropped.

Time was that retirees were supposed pay down their mortgages or drastically downsize their homes before retirement. But that behavior has changed, perhaps as a result of the refinancing boom or the housing crash—or both. According to the Consumer Finance Protection Bureau, more people are carrying mortgage debt into their retirement years, up from 22% in 2001 to 30% in 2011.

Even as the rate of homeownership has remained stable, the median amount owed on mortgages for people aged 75 and older increased 82% during that same decade, from $43,000 to $79,000. Delinquency in paying mortgages and foreclosures also greatly increased for seniors from 2007 to 2011.

The lesson in all this is that while financing one’s home can be hugely beneficial, mortgages can grow into significant burdens when you’re living on a fixed income. The time to stretch yourself financially on a home is not when you’ve already left the workforce and have no way to make more money.

It’s not just larger mortgages that saddle retirees—it’s everything that comes with homeownership, including property taxes, homeowner’s insurance, home repairs, housecleaning, gardening and yard services. At the same time, transportation, entertainment and travel expenses all tend to decline as a natural course of retirement.

It seems that people have an easier time forgoing vacations and restaurant dining than they do square footage and lawns, which is understandable. The comforts of home can bring great stability during a time of transition. But as we struggle to figure out how much money we will need in retirement, we might need to consider how to defray the expense of these patterns.

For those in mid-career, now is the time to get control of our mortgage costs. As a recent study by Pew Charitable Trusts shows, Gen X has lower wealth than their parents did at their age, in large part because they hold nearly six times more debt, including student loans, unpaid medical bills and credit card balances. And that’s despite having generally higher family incomes than their parents did.

Given these headwinds, we may want to rethink the American way of constantly trading up to larger houses through our 40s and 50s. The more we grow accustomed to more luxurious living, the harder it will be to downsize when it makes sense. Perhaps instead of looking at smaller houses merely as “starter homes,” we should be looking at them as “stay put” homes instead.

Millennials face a different challenge. After taking longer to get started in their careers, they will end up buying houses later in life, which means they risk carrying significant mortgages into retirement. They would benefit from not biting off more than they can chew—putting more cash down than the minimum, not buying more house then they can really afford, and making sure to max out out their 401(k)s or IRAs. Home equity can be an excellent investment, but only if it enhances rather than jeopardizes financial security—now and in the future.

Konigsberg is the author of The Truth About Grief, a contributor to the anthology Money Changes Everything, and a director at Arden Asset Management. The views expressed are solely her own.

MONEY real estate

The High Cost of Failing to Refinance

Many homeowners have missed out on big savings by not refinancing, new research finds. Here's why.

Until recently, I’d never seen a mortgage rate south of 6%. Of course I’d heard that rates had dropped to almost half that, and yet, for a variety of reasons, I did not take advantage of them by refinancing my existing mortgage. Though illogical, my inertia is not uncommon. According to a recent paper by researchers at the University of Chicago and Brigham Young Unversity, the “failure to refinance” strikes approximately 20% of homeowners who could greatly benefit from the lower interest rate environment.

The costs of this failure can be sizeable over time. Say you had a 30-year fixed-rate mortgage of $200,000 at an interest rate of 6.5%. If you refinanced at 4.5 % (approximately the decrease between 2008 and 2010), you would save over $80,000 in interest payments over the life of the loan, even after accounting for refinancing transaction costs. If you had refinanced in late 2012, when rates hit an all-time low of 3.35%, you would save $130,000 over the life of the loan.

Failing to refinance isn’t completely irrational. Refinancing is a difficult transaction requiring extensive paper work, an appraisal and hefty fees. All of which triggers what the researchers call “present bias,” a psychological phenomenon that makes it harder for people to make decisions that may have upfront costs but longer-term benefits.

My own story illustrates the way that present bias impacts behavior. When I bought my current home in 2007, my rate on a 30-year fixed mortgage was 6.625%. As rates began to drop, I was never entirely clear how to calculate at what point refinancing would make sense financially. At the same time, I was receiving mail offers promising to save me money merely by increasing the number of mortgage payments a year. That made me wary of being taken advantage of by lenders looking to make money in transaction costs off of unsuspecting buyers. (This wariness has also always made me distrustful of any loans with “points.”)

By 2011, however, rates had clearly fallen enough to justify a refinance. But by that point I was considering moving, and I didn’t want to go through all the paperwork and hassle if I was going to be selling soon anyway. Then, like many others, I found that my house’s assessed value had fallen sharply from my purchase price. Given the weak real estate market at the time, it made more sense to stay put. Even though I knew that refinancing would still benefit me, the uncertainty about my future brought about by market forces only delayed my decision more.

Finally, in 2013, I refinanced. I wound up borrowing more as part of another financial transaction, but at an interest rate of 3.46%, my monthly payments are almost the same as they were before. I have since heard of wise colleagues who, instead of lowering their monthly payments, refinanced from a 30-year mortgage to a 15-year mortgage and as a result will own their homes outright in half the time while making about the same payments.

Which, if you think about it, means that they overcame “present bias” twice: first in the act of refinancing, and then by forgoing having extra cash on hand to spend now in order to be debt-free in 15 years. At the end of the day, refinancing isn’t just about saving money; it’s about what you do with that money that can make a huge difference to your long-term financial security.

Konigsberg is the author of The Truth About Grief, a contributor to the anthology Money Changes Everything, and a director at Arden Asset Management. The views expressed are solely her own.

MONEY housing

How the Financial Crisis Put Up Two More Barriers to a Secure Retirement

Two new studies underline housing and income challenges facing older Americans.

Monday marks the sixth anniversary of the bankruptcy filing of Lehman Brothers, a key event in the Wall Street meltdown that led to the Great Recession. The recession wreaked havoc on the retirement plans of millions of Americans, and two studies released last week suggest that most of us haven’t recovered well.

To be more precise: Middle- and lower-income Americans haven’t recovered at all, while the wealthiest households have done fine.

The Joint Center for Housing Studies of Harvard University (JCHS) issued its findings on the challenges we face meeting the housing needs of an aging population in the years ahead. Meanwhile, the Federal Reserve Board released its triennial Survey of Consumer Finances (SCF), a highly regarded resource for understanding American households’ finances.

The Harvard study found that our existing housing stock is ill-suited to meet seniors’ needs, including affordability, accessibility, social connectivity and support services. And high housing costs are eating into the ability of low-income older adults to pay for necessities like food and healthcare.

Housing is the largest expenditure in most household budgets, and so is a linchpin of financial security and well-being. “It’s really at the nexus of your financial health, physical health and healthcare,” says Jennifer Molinsky, research associate at the JCHS and principal author of the study.

Harvard found that a third of adults over age 50 pay more than 30% of their income for housing—including 37% of people over age 80. Harvard defines that group as “housing cost burdened.” Another group of “severely burdened” older Americans spend more than 50% of income on housing. That group spends 43% less on food, and 59% less on healthcare, compared with households that can afford their housing.

Homeowners are much less likely to be cost-burdened than renters, the study found. But more homeowners are carrying mortgages well into retirement. More than 70% of homeowners aged 50 to 64 were still paying off mortgages in 2010.

The Federal Reserve findings on middle-class retirement prospects are equally troubling. Despite the economy’s gradual mending, the SCF found a widening gap in income and net worth. The top 10% of households was the only income band registering rising income (up 2% since 2010). Households between the 40th and 90th percentiles of income saw little change in average real incomes from 2010 to 2013. And the rate of homeownership was 65%, down from 69% in 2004 and 67% in 2010.

Ownership of retirement plan accounts also fell sharply. In the bottom half of income distribution, just 40% of households owned any type of account—IRA, 401(k) or traditional pension—in 2013, down from 48% in the 2007 survey. The Fed attributes the drop mainly to declining IRA and 401(k) coverage, since defined benefit coverage remained flat. Meanwhile, coverage in the top half of income distribution was much higher. In the top 10%, 95% of families are covered.

Overall, the average value of retirement accounts jumped a substantial 10% from 2010 to 2013, to $201,300. The Fed attributed that to the strong stock market and larger contributions. But for the lowest-income group that owned accounts, the average combined IRA and 401(k) value was just $39,100—and that is down more than 20% from 2007.

Considering the stock market’s strong performance in the intervening years, that suggests many of these households either sold while the market was depressed, drew down savings—or both. Meanwhile, upper-middle-income households saw a gain of 20% since 2007.

In Washington, lobbyists and policymakers have been debating about whether a retirement crisis really is looming. The various sides typically filter the data to support their viewpoints and agendas. But it’s difficult to think of two sources aligned than the Federal Reserve Board and Harvard. The SCF, in particular, is widely viewed as a gold standard survey that will be relied on for many economic reports in the months ahead. It includes information on the household balance sheets, pensions, income and demographic characteristics of about 6,500 families.

The JCHS study was funded by the AARP Foundation and The Hartford insurance company, so there’s a possible agenda there, if you doubt Harvard’s independence as researchers. (I don’t.)

Taken together, the studies paint the portrait of a widening divide in the retirement prospects of working Americans. No matter how the data is sliced, we’ve got problems that need to be addressed.

MONEY Kids and Money

The Surprising Thing Gen Z Wants to Do With Its Money

Teen in front of home
Getty Images

More than half of teens would give up social media for a year and do double the homework if it guaranteed they’d be able to buy a house when they're older.

During the Great Recession, home ownership took a beating as the ideal for the American dream. The median home nationally lost a quarter of its value, prompting adults of all ages to adopt other elusive goals—like retiring on time for boomers or working on their own terms for millennials.

Just 65% of Americans own their home, down from 69% pre-bust. And four out of five Americans are rethinking the reasons they’d want to buy a house in the first place. But Generation Z—also known as post-millennials, born after the 1990s Internet bubble— seems to prize home ownership like no generation since their great-grandparents.

An astounding 97% of post-millennials believe they will one day own a home; 82% say it is the most important part of the American dream, according to a survey of teens age 13 to 17 by Better Homes and Gardens Real Estate. More than half would give up social media for a year and do double the homework if it guaranteed they’d be able to buy a house.

This yearning stands in starkest contrast to the aspirations of millennials, older cousins who pretty much created the sharing economy and in large numbers prefer to rent. The housing bust and foreclosure epidemic scarred millennials, probably for life, as some watched parents and neighbors lose everything. In a key part of this generation—heads of households age 25 to 34—renters increased by more than 1 million in the years following the crisis, while the number who own a home fell by 1.4 million.

Post-millennials saw the carnage, too, though at a tender age that left them more confused than traumatized. Where millennials hardened and vowed never to repeat the errors of their parents, post-millennials sought the comfort of family and togetherness, says Sherry Chris, CEO of Better Homes and Gardens. “Many of these Gen Z teens were 7 to 11 years old when the recession hit,” Chris said. “At that age, children equate home with stability.”

The innate quest for stability leads them to prize a family home above things like going to college, getting married, having children, or owning a business, according to the survey. And the dream appears firmly grounded in reality. Chris observed that today’s teens have more information than any previous generation at their age and show early signs of financial awareness. Asked for an estimate of what they might spend on a house, the 97% who aspire to be owners gave an average response of $274,323—strikingly close to the median home value of $273,500.

Half say they know more about money than their parents did at their age. Two-thirds attribute their knowledge of money matters to discussions in the home, and two in five credit discussions in school. Three in five teens have already begun saving, the survey found. Post-millennials, on average, aim to own a home by age 28—three years earlier than the median age of first-time homebuyers reported by the National Association of Realtors.

These are encouraging findings. A home remains most Americans’ single largest asset, and while the housing bust will have lingering effects, home prices nationally tend to rise every year—and have been trending up again the past few years. Not all of the news is good: Only 17% of post-millennials believe stocks are the best long-term investment; half prefer a simple savings account, TD Ameritrade found in a survey that defines the generation as slightly older (up to age 24).

But the TD survey also found that post-millennials have half the post-college credit card debt of millennials. And the Better Homes survey suggests that our youngest generation is at last learning more about money at an early age, which is the goal of a broad public-private financial education movement. A generation of financially adept youth who begin to save and gather assets that will grow for four or five decades is the surest way to avoid another meltdown and solve the retirement savings crisis.

Related:
Why Gen X Feels Lousy About the Recession and Retirement
Our Retirement Savings Crisis—and the Easy Solution

TIME real estate

A Manhattan Parking Spot Now Runs You a Cool $1 Million

Because it's all about location

A new luxury development in New York City is pushing Manhattan’s gilded real estate market to new heights.

Some parking spaces in the development will be selling for $1 million a pop, the New York Times reports, in a city where every square foot of space is fast becoming a luxury.

The new housing unit rising above the cobblestoned streets of the SoHo neighborhood will sell 10 parking spaces in its basement at a rate of $5,000 to $6,500 a square foot, or a few thousand dollars more than the three-bedroom apartments upstairs. Because parking, perhaps even more so than real estate, is all about location, location, location.

[NYT]

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