Homes and Lottery Winner

Here are a couple pieces I ran into today that I thought were worth sharing:

• Home prices plunge as sales slow sharply -- Sales of new and existing homes plummeted in November, as buyers stayed out of the market amid the growing financial crisis and deepening recession, according to figures released Tuesday.

Sales of existing homes fell 8.6 percent, far more than expected, to an annual rate of 4.49 million in November, from a downwardly revised pace of 4.91 million in October. The median sales price fell 13.2 percent — the largest amount on record — to $181,300, from $208,000 a year ago.

That was the lowest price since February 2004 and the biggest year-over-year drop on records going back to 1968. The drop in home prices was probably the largest since the Great Depression, NAR chief economist Lawrence Yun told reporters.

Looks like we haven't hit the bottom yet. Maybe I was lucky not to have purchased a home this past fall.

• Lewisville assistant police chief wins $13 million in Lotto Texas -- A Lewisville assistant police chief is the sole winner of this month's $13 million Lotto Texas drawing, lottery officials announced Friday. Her prize will be paid in 25 annual installments of $390,000.

She plans to keep working at the Police Department, and she's going to indulge just a little: "I've got an SUV, and since I really have a thing for cars, I'm going to let myself buy a new one."

Sounds like she's keeping her head on straight, so good for her. Hopefully, I'd do the same thing. One thing I would do differently, I'd quit asap!

Comments

[thomas]

She took the annual installments? Idiot.

I wouldn't quit my job, but I'd definitely be looking for that job where I go home happy and/or no worries at the end of the day. However my tolerance for putting up w/ sh!t would drop significantly, increasing the likelihood of having a Jerry Maguire moment.

[ekrabs]

I think the fact that she is not quitting right away shows that she indeed has her head on her shoulders.

I believe in such a thing as "windfall shock", and it's best to transition slowly but surely.

As for lump sum vs. annual payments, I've heard both sides, and I honestly don't think there is a clear cut and simple answer. However, I also don't know the details of tax codes and regulations surrounding Texas lotteries, so I can't say for sure.

But then, I suppose that's the point too. Perhaps it's not an idiotic move. In fact, perhaps there may not even be an option for a lump sum pay-out....

[Bill]

At $390k/ year annuity she may have made a decent tax move since much of the 390 will be taxed lower than 39%. That said it is very likely that the tax rates on 390k will rise substantially in the near future...I'm not wishing it or making a political statement, I'm merely pointing out that the money will need to come from somewhere and soon.

Winning 13 million may feel like a lot, but if you go blowing it on stuff, you may just find yourself broke. looks like she is taking the right approach with keeping her job for now (stats show that people who do this don't stay very long).

[Brian]

I think I'd take the lump sum rather than wait 25 years to get all of my money. That way I could invest the money as I saw fit rather than loan the Texas lottery that money for 25 years. Besides, with tax rates likely to go up, I would rather take the tax hit now, than in the future.