WACO, Texas (KWTX) - Gas prices fluctuate heading into a busy Labor Day weekend as crude prices jump following Hurricane Idalia’s wake, according to AAA Texas.
The statewide gas price average in Texas is $3.42 for a gallon of regular unleaded fuel, according to the AAA Texas Weekend Gas Watch. That price is two cents less than on this day last week, and is six cents more per gallon compared to this day last year.
Of the major metropolitan areas surveyed in Texas, drivers in El Paso are paying the most on average at $3.93 per gallon while drivers in San Angelo are paying the least at $3.27 per gallon.
The national average price for a gallon of regular unleaded is $3.82, which is two cents less when compared to this day last week and two cents less than the price per gallon at this same time last year.
While the statewide gas price average is down from a week ago, it has increased slightly over the last three days. This suggests price fluctuations remain possible through the holiday weekend.
There are two key factors that could cause gas prices to further increase in the days ahead:
Travel Demand
It’s been a record summer for travel and there will be more pressure on demand for fuel this Labor Day, reports AAA Texas. AAA Travel domestic bookings are four percent higher for the holiday over last year. This could mean gas prices will increase in the days to come. Supplies for fuel remain healthy, but have dropped week to week.
Hurricane Impact
Hurricane Idalia caused three refineries to temporarily shut down along on the Gulf Coast, which could put upward pressure on fuel prices. Typically following a hurricane that impacts oil/gas operations there can be brief spikes in pump prices.
As the market settles and supply/demand rebalances, prices usually come down after a couple of weeks. Crude prices rose as Idalia made landfall along Florida’s Gulf Coast. Crude accounts for 50% of the cost of gasoline.
“While gas prices have increased slightly in the last few days, holiday travelers will see pump prices fairly close to where they were a year ago,” said Daniel Armbruster, AAA Texas spokesperson. “Demand for fuel remains strong which could cause prices to further increase over the holiday. AAA Travel bookings are four percent higher compared to Labor Day 2022 and Hurricane Idalia also put upward pressure on fuel prices.”
Look you guys, a streaming service that’s actually lowering prices. (Take note, Disney.)
A few days ago, an annual subscription to Starz cost $74.99; today, it’s $69.99. Existing subscribers were notified of the good news via email, and will see the price adjustment in their next billing cycle.
“As one of the few streaming networks that is profitable, we are always looking for ways to drive success for the business while providing great value to our customers,” Alison Hoffman, Starz president of domestic networks, said in a statement shared with IndieWire. “Our annual plan subscribers are some of our most valuable customers, so we wanted to find ways to drive more people into the plan and reward our existing customers.”
(Starz parent company Lionsgate reported a $37.7 million profit for Starz during the April-to-June quarter, when it finished with 26.6 million total subscribers across cable and streaming.)
Well, for starters, the “Outlander” Season 7 midseason finale aired and streamed August 11 on Starz. Anecdotally, count this reporter’s household (read: wife) among the many whose Starz subscriptions come and go with each passing adaptation of the Diana Gabaldon-novels series. (“Party Down,” you know I love you.)
“Outlander” is a big, big deal for Starz — and it won’t be back for the back-eight episodes until next year. Meanwhile, the ongoing writers and actors strikes are clogging up the development pipeline, which is impacting every platform that relies on originals.
It’s not like Starz doesn’t have any programming next month. There’s a trio of sophomore-season finales — “Minx” (September 8), “Heels” (September 15), and “Outlander” spinoff reality series “Men in Kilts: A Roadtrip with Sam and Graham” (September 1) — and one premiere for “Power Book IV: Force” (September 1). Plus, “John Wick 4” debuts on the service on September 26.
And in October, “The Blackening” is coming on October 4; “Are You There God? It’s Me, Margaret” follows one week later. “Shining Vale” returns on Starz on October 13. So there are comings and goings — it’s the fewer comings and one that one very specific going that Starz is worried about.
Still, Starz is very much bucking the price-hike trend, which is to monetize the living hell out of your existing subscribers while the getting is good. In previous years, the general approach to achieving streaming profitability was scale — or growing your subscriber base at all costs.
If $69.99 per year is still too rich for your blood — and believe me, we’re not judging — Starz is currently running a promotional special of $3 per month for three months. The Lionsgate-owned premium-cable and streaming platform will periodically do this sort of thing (at differing price points) as programming ebbs and flows.
Lionsgate was initially trying to find a buyer for Starz, but no one bit. The company now plans to spin off its studio (a move that is very much on trend) and sell that piece instead. Earlier this month, Lionsgate purchased eOne from Hasbro for $500 million.
Starz is actually exiting the Latin America market at the end of this year; it will focus on the U.S., Canada, and the UK.
As a homeowner and real estate investor, I want home prices and rents to rise. Real estate is an integral part of my Fat FIRE strategy of perpetually generating six figures in passive income. So when I saw Zillow's latest bullish housing price forecasts, I was thrilled!
Zillow believes national home prices will increase by 6.5% through July 2024, which seems overly aggressive in this high interest rate environment. If you have a 20% downpayment or 20% equity, a 6.5% price increase is like making a 32.5% gross return on your cash or home equity. That's a pretty hefty return.
After feeling good for a moment about my real estate portfolio increasing in value next year, reality set in. In the past, Zillow has been wrong consistently when it comes to forecasting housing prices. I don't this time is any different.
Zillow Housing Price Forecasts By Region And State
See the map below showing Zillow's home price forecasts by region. Notice how Zillow believes home prices will rise by 2% to 10% in every state except for three regions in Louisiana.
So maybe three months later, Zillow and other institutions are coming around to my point of view? I just think 6.5% is too aggressive by at least two percentage points.
Why Zillow's Housing Price Forecasts Are Likely Wrong
Here are five reasons why I think a 6.5% annual home price appreciation is unlikely.
1) Affordability is at or near an all-time low
With housing affordability at near an all-time low due to high mortgage rates and high home prices, an aggressive home price appreciation forecast of 6.5% makes no sense.
Below is a chart that highlights the US median housing payment as a percentage of median income. At ~43.2% today, the percentage is higher than it was right before home prices started declining in 2H2006.
Here's another chart highlighting the Bloomberg Housing Affordability Index for first-time buyers. Based on the below chart, the index is at an all-time low.
2) Historical home price appreciation is closer to 4.6% per year
Since 1992, the historical annual home price appreciation has been closer to 4.6%, about 2.6% above the Fed's target inflation rate of 2%.
If inflation rebounds to around 4%, then Zillow's 6.5% home price appreciation forecast could come true. But over the next 12 months, CPI will likely stay below 4%.
The lag effect from the Fed rate hikes should continue to slow the economy. Therefore, it doesn't make sense for Zillow to forecast 6.5% home price appreciation, a rate 43% higher than the historical average.
Looking at this historical nominal home price appreciation chart, a 6.5% home price appreciation through 2024 is certainly possible. However, it's more likely that nominal price appreciation undershoots after overshooting far beyond the historical 4.6% nominal price appreciation rate.
3) Zillow is too biased to have accurate forecasts
Zillow makes more money when housing prices go up and when there are more real estate transactions. The stronger the housing market, the more real estate agents want to advertise their services on Zillow.
When the housing market is weak, home sales volume dries up, leading to a decline in advertising revenue from real estate agents and property management companies.
Therefore, Zillow is incentivized to have a more bullish bias on housing than average. Their entire business model depends on a strong and rising housing market. In fact, Zillow recently launched a 1% down program for qualified buyers.
Given Zillow's bias towards a strong housing market, we must discount Zillow's bullish views. We know bias exists everywhere in society – from first-generation college admissions officers accepting more first-generation applicants to 95% of Black voters voting for Obama in 2008.
We can't help but show preference for things and people that are most similar to ourselves or help us the most.
4) Revisionist history
Years ago, I wrote you can't trust Zillow's estimates because I had noticed large inconsistencies. Zillow would have one estimate on a home, then completely change its historical estimates after the home was sold. By doing so, Zillow removed evidence of how wrong its estimates originally were.
As a result, I mainly use Zillow (and Redfin) to determine trends in my local real estate market. Both platforms are good resources to track sold homes, which you can then use to formulate your own price estimates.
Finally, when Zillow launched its iBuying business in December 2019, I was eager to see how it would do. If Zillow's housing estimates were accurate, then Zillow would be able to buy properties at an attractive prices and later sell these properties for healthy profits.
However, Zillow's iBuying business was a complete dud. In 2022, Zillow took a $540 million write-off (loss) and laid off over 2,000 staff because it shut down its iBuying business.
In other words, even Zillow couldn't trust its own estimates! Most buyers who buy at the wrong price don't just hand over the keys and file for bankruptcy. Instead, most of these homeowners gut it out by refinancing, renting out rooms, or figuring out ways to make more money.
But not Zillow. As a public company, Zillow's main goal is to grow profits to hopefully boost its share price for its shareholders. As a result, Zillow is more focused on short-term quarterly results.
The Direction Of Home Prices In America
Going through this exercise actually makes me less bullish on home price appreciation over the next year. Instead of a more reasonable 2% home price appreciation, why couldn't national median home prices actually decline by 5%, especially if there's another recession?
The S&P CoreLogic Case-Shiller National Home Price Index shows national prices are flat in 2023 vs. last year. Although home price appreciation is ticking up in 2023, it could just as easily tick back down again in 2024 too.
The rate-lock effect is discouraging homeowners from selling their homes, which keeps supply low and supports prices. The main question is whether supply or demand will increase at a greater rate if mortgage rates decline over the next 12 months.
The worry for potential homebuyers sitting on the sidelines is that pent-up demand is building each month that home sale volume hovers at record lows. If mortgage rates decline, then bidding wars will likely resume, quickly pushing prices back up.
The worry for potential home sellers is that once mortgage rates decline, too many homeowners will start listing their homes and cause an oversupply situation. Builders might ramp up construction as well, creating even more incremental supply and declining prices.
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My Previous Bad Luck Will Throttle Home Prices
Perhaps the final reason why I think Zillow's home price forecast is too high is because I'm currently trying to buy a home with contingencies. Although I'd like to think I understand real estate well given I've invested in multiple properties since 2003, I've also gotten burned before.
In 2007, I decided to buy a vacation property in Lake Tahoe for about 12% off its original sales price in 2006. I thought I was getting a great deal. Of course, the global financial crisis hit, causing the condo I bought to depreciate by another 50% at its low point!
I don't think the home I want to buy will depreciate by a similar magnitude since it is a single-family home in a prime location as opposed to a condotel. But this single-family home could easily depreciate by another 5% – 10% if the economy tanks again.
Given my history of bad luck, I highly doubt I'll bottom-tick this beautiful home and then see it appreciate by 6.5% a year later. Real estate down cycles often take years to play out. Instead, I'm mentally and financially prepared for my target home's value to continue depreciating by another two years.
So Why Buy A Home Now?
I'm trying to buy now because I've identified the nicest home I can afford. I've got 12-15 years before my kids leave home, so I figure why not go for the upgrade when prices are down.
There is a lull in demand due to high interest rates. Meanwhile, the higher the price point you go, the better deals you can usually get. I'd don't want to get into a potential bidding war if mortgage rates decline in the future.
I'd love for Zillow to be right about its housing price forecast. But based on its track record, I think Zillow will be wrong like Donkey Kong again.
Reader Question and Suggestions
What do you think of Zillow's housing price forecasts of 6.5%? Where do you think the national median home price will go over the next 12 months?
If you want to leg into real estate more slowly, as opposed to buying a property with a mortgage, check out Fundrise. You can invest in a Fundrise fund with as little as $10. Fundrise primarily invests in residential and industrial properties in the Sunbelt, where valuations are lower and yields are higher.
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The cheapest tier is going from $60 to $80 per year.
ByEmma Roth, a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.
Illustration: Alex Castro / The Verge
Sony is raising the price of its PlayStation Plus subscription next month. The service’s annual Essential plan will go from $60 to $80, the Extra plan from $100 to $135, and the Premium plan from $120 to $160. The new pricing goes into effect starting September 6th.
If you’re currently subscribed to PlayStation Plus, Sony says the price increase won’t take effect until your next renewal date or after November 6th. However, if you make any changes to your subscription, “such as upgrades, downgrades or buying additional time,” you’ll have to pay the new rate.
Sony says the price hikes will go into effect globally and will allow the company to “continue bringing high-quality games and value-added benefits” to the service. It adds that the yearly plans will still come at a discounted rate as opposed to the one- or three-month subscriptions that it offers.
Launched last year, PlayStation Plus is Sony’s answer to Xbox Game Pass, which allows you to play a rotating selection of games each month. For the month of September, PlayStation Plus will include Saints Row, Black Desert: Traveler Edition, and Generation Zero.
A pharmacist displays boxes of Ozempic, a semaglutide injection drug used for treating type 2 diabetes made by Novo Nordisk, at Rock Canyon Pharmacy in Provo, Utah, U.S. March 29, 2023.
The Biden administration this week released the first 10 drugs that will be subject to those talks, a process that aims to lower the prices of medications that Medicare Part D spends the most on. The changes will take effect by 2026.
Ozempic will likely be eligible for negotiations by the time the next round of drugs is selected in 2025, for price changes that will go into effect in 2027.
Several analysts expect the weekly injection to be a top choice because Medicare Part D already spent more than $2 billion on the drug in 2021 — an amount close to some of the medicines chosen for price talks this week. TotalPart D spending in 2021 was $98 billion.
They assume that Medicare will spend a great deal on Ozempic in the coming years, given the fervent demand for the drug and similar treatments that can help patients shed unwanted pounds.
"Ozempic is going to be the biggest one that people are going to watch really closely in the second round of negotiations," Cantor Fitzgerald analyst Louise Chen told CNBC.
Novo Nordisk's Rybelsus, a diabetes drug taken orally, could also be on the list because it contains the same active ingredient as Ozempic. Most Part D plans cover both for patients with Type 2 diabetes, but do not cover the drugs for off-label uses such as weight loss.
Meanwhile, Novo Nordisk's obesity injection Wegovy, which uses that same ingredient, likely won't be targeted for negotiations in the near term because Medicare doesn't cover weight loss drugs.
A spokesperson for Novo Nordisk didn't directly comment on the potential for Ozempic to be included in the next round of talks. The spokesperson said the company "supports policies to ensure patients can afford their medicines," but criticized the negotiation process, which is conducted by the federal Centers for Medicare and Medicaid Services, or CMS.
"Unfortunately, we have seen CMS take aggressive steps to carry out unilateral price setting without consideration for the impact on patients living with chronic disease or the overall healthcare system," the spokesperson said.
Ozempic, Wegovy and Rybelsus are part of a class of drugs called GLP-1s, which mimic a hormone produced in the gut to suppress a person's appetite.
Wegovy and Ozempic sparked a weight loss industry gold rush last year, with high-profile names such as billionaire tech mogul Elon Musk among recent users. But the injections are costly, as prices range from around $900 to more than $1,300 per month.
Medicare and private insurers typically secure discounts and rebates on the drugs they cover, but it's unclear how large they are.
Why Ozempic wasn't eligible this year
The Medicare program spent $2.6 billion on Ozempic in 2021, according to AARP research. Based on that number, AARP said Ozempic was the 10th costliest drug covered by Medicare Part D.
But Ozempic was excluded in the first round of negotiations due to the federal government's guidelines for selection.
The guidelines require drugs to have been on the market for at least seven years after their initial approval or licensing in the U.S., as of the date that the Biden administration publishes the list of products selected.
The Food and Drug Administration approved Ozempic for diabetes in December 2017, making it ineligible for the initial round of drugs unveiled this week. But Ozempic will likely be eligible for the next list of medications, which will be published in February 2025, Evercore ISI analyst Umer Raffat said in a research note.
"This means Novo's Ozempic (along with Rybelsus) could be on next year's list," he wrote.
Several analysts agree, citing the amount Medicare spent on Ozempic in 2021. That places the drug at the very top of prediction lists for the second round of negotiations.
Slashing the price of Ozempic through negotiations could lead to significant savings for the Medicare program.
Medicare would save an estimated $1.3 billion if the price of Ozempic was reduced by 40%, according to research from Leerink Partners analyst David Risinger. Meanwhile, the program would save only around $342 million if Rybelsus was cut by the same amount.
It's unclear how much patients pay out of pocket for Ozempic, which has a list price of $936 per month in the U.S. But a lower negotiated price of Ozempic will likely benefit the roughly 28% of Medicare beneficiaries who have diabetes.
Wegovy fate is uncertain
There's still a chance that negotiations could affect Wegovy, particularly if Medicare decides to start covering the injection and other weight loss treatments before the second round.
Analysts from Citigroup, in a note last week, said that's likely because recent research demonstrated Wegovy's heart health benefits.
Weight loss drugs are being assessed for their ability to treat conditions like dementia and addiction after a landmark study showed that Wegovy helped reduce the risk of heart attacks and strokes.
Bloomberg | Bloomberg | Getty Images
Earlier this month, Novo Nordisk released late-stage trial data showing that Wegovy slashed the risk of serious heart-related problems such as heart attacks or strokes by 20%.
The results suggest Wegovy has significant health benefits beyond helping patients lose weight, which could potentially lead to expanded use of the drug and increased coverage by insurers.
Other analysts say that savings from the first round of drugs could help pave the way for Medicare to cover Wegovy.
Four of the 10 drugs selected for negotiations cost Medicare more than $17 billion a year before any discounts or rebates. Lowering prices for those drugs could potentially "free up" Medicare's budget and make it easier for the program to cover popular GLP-1s like Wegovy, according to a note from Wells Fargo analyst Mohit Bansal.
The cheapest tier is going from $60 to $80 per year.
ByEmma Roth, a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.
Illustration: Alex Castro / The Verge
Sony is raising the price of its PlayStation Plus subscription next month. The service’s annual Essential plan will go from $60 to $80, the Extra plan from $100 to $135, and the Premium plan from $120 to $160. The new pricing goes into effect starting September 6th.
If you’re currently subscribed to PlayStation Plus, Sony says the price increase won’t take effect until your next renewal date or after November 6th. However, if you make any changes to your subscription, “such as upgrades, downgrades or buying additional time,” you’ll have to pay the new rate.
Sony says the price hikes will go into effect globally and will allow the company to “continue bringing high-quality games and value-added benefits” to the service. It adds that the yearly plans will still come at a discounted rate as opposed to the one- or three-month subscriptions that it offers.
Launched last year, PlayStation Plus is Sony’s answer to Xbox Game Pass, which allows you to play a rotating selection of games each month. For the month of September, PlayStation Plus will include Saints Row, Black Desert: Traveler Edition, and Generation Zero.
Home prices have increased in 20 major cities.(iStock)
Home prices across the nation have increased for five straight months as of June, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index data.
Case-Shiller's National Index posted a month-over-month increase of 0.7%. Meanwhile, the 10-City and 20-City Composites, measuring home prices in major metros across the U.S., both posted increases of 0.9%.
The National Composite "now stands only 0.02% below its all-time peak from exactly one year ago," S&P DJI Managing Director Craig Lazzara said in a statement.
But home price movements varied significantly across different areas, the analysis found.
Three major cities again led the way in terms of annual home price increases in June, according to the 20-City Composite Index.
Chicago (+4.2%)
Cleveland (+4.1%)
New York (+3.4%)
"The recovery in home prices is broadly based," S&P Dow Jones said in its analysis. "Prices rose in all 20 cities in June, both before and after seasonal adjustment. Over the last 12 months, 10 cities show positive returns. Otherwise said, half the cities in our sample now sit at all-time high prices."
On the other hand, the metros where home prices took the deepest plunge were San Francisco (-9.7%) and Seattle (-8.8%). Regionally, the strongest gains were seen in the Midwest (+2.8%) and the Northeast (+1.6%), according to the data. The West (-5.9%) came in as the weakest region.
If you are ready to shop for the best rate on a mortgage, you could visit an online marketplace like Credible to compare options from multiple lenders at once without affecting your credit score.
Redfin’s Homebuyer Demand Index, which gauges requests for tours and other home-buying services from Redfin agents – dropped 3% from last year, and mortgage-purchase applications went down about 23%.
Still, the average U.S. home price was $382,000 during the four weeks ending July 23, representing a 2.6% increase from last year and the sharpest spike since November, Redfin said.
Nonetheless, Redfin’s analysis also unearthed significant drops in home prices in these cities.
In fact, just 2.6% of U.S. mortgages were in a state of delinquency in May, signaling a modest decrease from 2.7% last year.
CoreLogic defines delinquency as mortgages that are 30 days or more past due. Here's how the different levels of delinquency stood based on the firm’s analysis.
Early-stage delinquencies (30 to 59 days past due): 1.3%, up from 1.1% in May 2022
Adverse delinquency (60 to 89 days past due): 0.4%, up from 0.3% in May 2022
Serious delinquency (90 days or more past due, including loans in foreclosure): 1%, down from 1.3% in May 2022
"May’s overall mortgage delinquency rate matched the all-time low, and serious delinquencies followed suit," CoreLogic Principal Economist Molly Boesel said in a statement. "Furthermore, the rate of mortgages that were six months or more past due, a measure that ballooned in 2021, has receded to a level last observed in March 2020."
If you’re considering jumping into the housing market, it could benefit you to shop around for the best mortgage rates. Visit Credible to speak with a mortgage expert and get your questions answered.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.
Today’s S&P CoreLogic Case-Shiller Home Price Index for “June” is a three-month moving average of home prices whose sales were entered into public records in April, May, and June, and it still shows the seasonal effects of spring selling season, when prices typically rise on a month-to-month basis, but the effects began to fade, and the index rose month-to-month at a much slower rate (+0.9%) than in the prior three months of spring selling season (+1.5% to +1.7%).
Year-over-year, the Case-Shiller index fell 1.2%, the fourth month in a row of declines, and the biggest and only declines since the end of the Housing Bust.
Of the 20 metros in the index, 10 had year-over-year declines:
San Francisco Bay Area: -9.7%
Seattle: -8.8%
Las Vegas: -8.2%
Phoenix: -7.5%
Denver: -4.4%
Portland: -4.2%
Dallas: -4.1%
San Diego: -2.5%
Los Angeles: -1.8%
Tampa: -0.9%
Of the 20 metros in the index, 10 set new highs (YoY %):
Minneapolis: +0.7%
Washington DC: +0.6%
Boston: +0.9%
Charlotte: +1.7%
Atlanta: +2.1%
Detroit: +2.2%
Miami: +2.5%
New York: +3.4%
Cleveland: +4.1%
Chicago: +4.2%
The most splendid housing bubbles by metro.
The San Francisco Bay Area:
Month to month: +0.1%.
From the peak in May 2022: -10.9%.
Year over year: -9.7%.
This was the 8th month in a row of year-over-year declines. Note during Housing Bust 1 the waves of declines interrupted by year-over-year increases that didn’t mean that the Housing Bust was over:
And San Francisco’s most splendid Housing Bubble in its full glory:
Seattle metro:
Month to month: +0.8%.
From the peak in May 2022: -10.5%.
Year over year: -8.8%.
This was the seventh year-over-year decline in a row:
And Seattle’s most splendid Housing Bubble:
Las Vegas metro:
Month to month: +0.9%.
From the peak in July 2022: -8.2%.
Year over year: -8.2%
Phoenix metro:
Month to month: +1.1%.
From the peak in June: -7.5%.
Year over year: -7.5%
Denver metro:
Month to month: +0.4%.
From the peak in May 2022: -4.5%.
Year over year: -4.4%.
Portland metro:
Month to month: +0.8%.
From the peak in May 2022: -4.3%.
Year over year: -4.2%.
Dallas metro:
Month to month: +0.7%.
From the peak in June 2022: -4.1%.
Year over year: -4.1%
San Diego metro:
Month to month: +1.1%.
From the peak in May 2022: -3.2%.
Year over year: -2.5%.
This was the sixth month in a row of year-over-year declines:
And San Diego’s most splendid Housing Bubble:
Los Angeles metro:
Month to month: +0.9%.
From the peak in May 2022: -2.3%.
Year over year: -1.8%.
Tampa metro:
Month to month: +0.5%.
From peak in July 2022: -1.5%
Year over year: -0.5% (first month of year-over-year declines).
Washington D.C. metro:
Month to month: +0.7%.
Set new high in June 2023.
Year over year: +0.6%
Boston metro:
Month to month: +1.3%.
Set new high in June 2023.
Year over year: +0.9%
Miami metro:
Month to month: +1.4%
Set new high in June 2023.
Year over year: +2.5%
New York metro:
Month to month: 1.1%.
Set new high in June 2023.
Year over year: +3.4%
The Case-Shiller indices were set at 100 for the year 2000. Miami’s and San Diego’s index values of 414 today are up by 314% since 2000. This makes Miami and San Diego share the spotlight of the #1 Most Splendid Housing Bubbles in terms of price increases since 2000, followed by Los Angeles.
Methodology. The Case-Shiller Index uses the “sales pairs” method, comparing sales in the current month to when the same houses sold previously. The price changes are weighted based on how long ago the prior sale occurred, and adjustments are made for home improvements and other factors. This “sales pairs” method makes the Case-Shiller index a more reliable indicator than median price indices, but it lags months behind.
The remaining six of the 20 markets in the Case-Shiller index (Chicago, Charlotte, Minneapolis, Atlanta, Detroit, and Cleveland) have experienced far less house price inflation since 2000, and don’t qualify for this list of the Most Splendid Housing Bubbles.
OK, Chicago anyway.
Month to month: 1.1%.
Set new high in June 2023.
Year over year: +4.2%
Chicago’s index value of 195 is up by 95% from 2000 – nearly doubling in 20 years. While this is still a huge increase, the increase is 90 percentage points smaller than the smallest increase on the list of the Most Splendid Housing Bubbles, the New York metro, whose index increased by 185% in 20 years. And so Chicago doesn’t qualify for a spot on this list of the most splendid Housing Bubbles in America. But it’s trying for sure:
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The price negotiation program, established by Democrats as part of the Inflation Reduction Act, is expected to save the government tens of billions of dollars in the coming years.
The Biden administration on Tuesday unveiled a long-awaited list of the first 10 medicines that will be subject to price negotiations with Medicare, kicking off a landmark program that is expected to reduce the government’s drug spending but is being fought by the pharmaceutical industry in court.
The medications — which treat diabetes, cancer and other disorders — are taken by millions of older Americans and cost Medicare billions of dollars annually. The Centers for Medicare & Medicaid Services selected the drugs through a process that prioritized ones that account for the highest Medicare spending, have been on the market for years and do not yet face competition from rivals. Additional medications will be selected for price negotiations in the coming years.
Drugs Selected for Price Negotiations
1. Eliquis, for preventing strokes and blood clots, from Bristol Myers Squibb and Pfizer
2. Jardiance, for diabetes and heart failure, from Boehringer Ingelheim and Eli Lilly
3. Xarelto, for preventing strokes and blood clots, from Johnson & Johnson
4. Januvia, for diabetes, from Merck
5. Farxiga, for diabetes, heart failure and chronic kidney disease, from AstraZeneca
6. Entresto, for heart failure, from Novartis
7. Enbrel, for arthritis and other autoimmune conditions, from Amgen
8. Imbruvica, for blood cancers, from AbbVie and Johnson & Johnson
9. Stelara, for Crohn’s disease, from Johnson & Johnson
10. Fiasp and NovoLog insulin products, for diabetes, from Novo Nordisk
The final list had some overlap with what experts had anticipated. Its release was an important moment for Democrats, who have campaigned on a promise to lower the cost of prescription drugs. President Biden marked the occasion with remarks at the White House on Tuesday afternoon, in another sign that he intends to make lowering health care costs a theme of his 2024 re-election campaign.
“This is a long time in coming,” Mr. Biden declared after being introduced by a 71-year-old North Carolina man who has a rare blood cancer and diabetes. The president also took a shot at the drug industry, saying, “We’re going to keep standing up to Big Pharma, and we’re not going to back down.”
Stephen J. Ubl, the chief executive of the Pharmaceutical Research and Manufacturers of America, the drug industry’s main lobbying group, called the announcement “the result of a rushed process focused on short-term political gain rather than what is best for patients.” He warned that it would “have significant negative consequences long after this administration is gone.”
Medicare gained the authority to negotiate the price of some prescription medicines when Congress passed the Inflation Reduction Act last year, a signature legislative achievement for the president. The announcement on Tuesday is a key step toward those negotiations, which will unfold over the coming months, with the new prices taking effect in 2026.
The 10 selected medications range from very expensive drugs taken by relatively few older Americans to cheaper drugs taken by huge numbers of people. Imbruvica, which in a recent 12-month period was taken by 20,000 Medicare beneficiaries with blood cancers, has a sticker price of $17,000 a month. The blood thinner Eliquis, which was taken by 3.7 million beneficiaries, has a monthly sticker price under $600.
The negotiation program is projected to save the government an estimated $98.5 billion over a decade. It is also expected to eventually reduce insurance premiums and out-of-pocket costs for many older Americans, though the magnitude of those savings remains to be seen.
Some of the most significant direct savings for patients may accrue starting in 2028, when the first negotiated prices go into effect for drugs that are administered in clinics rather than taken at home. At that point, patients without supplemental insurance are likely to see their out-of-pocket costs drop for those drugs.
Other provisions of the Inflation Reduction Act — including a new $35 monthly cap on out-of-pocket costs for insulin and, starting in 2025, a $2,000 annual cap on patient costs for drugs taken at home — will most likely do more to directly save money for Medicare beneficiaries.
Medicare already pays reduced prices for drugs on the list, reflecting rebates that are passed down by pharmacy benefit managers, the middlemen that negotiate discounts with manufacturers. But before passage of the Inflation Reduction Act, Medicare was explicitly barred from negotiating prices directly with manufacturers.
Republicans in Congress opposed authorizing Medicare to negotiate prices, criticizing the move as tantamount to imposing government price controls.
The suits make a variety of constitutional claims, including that the requirement that drugmakers negotiate or pay a fine violates the Fifth Amendment’s prohibition on the taking of private property for public use without just compensation.
The drug industry fears that the Medicare negotiation program will open the door for lower prices in the private market. Until now, secrecy about how much different customers pay for medications has helped prop up prices. But when the government’s lower prices are made public, experts say, pharmacy benefit managers negotiating on behalf of the privately insured will have greater leverage to demand deep discounts.
Now that the list of drugs is public, their makers have until Oct. 1 to declare whether they will participate in negotiations with the government. Companies that decline to negotiate must either pay a large excise tax or withdraw all their products from both Medicare and Medicaid, the federal-state program that provides health coverage to low-income people.
In statements on Tuesday, pharmaceutical manufacturers whose products made the list were circumspect about how they planned to proceed with the negotiations, emphasizing that they were committed to ensuring access for patients.
Polling by KFF, a health policy research organization, has found broad, bipartisan public support for allowing Medicare to negotiate prices. In a survey late last year, 89 percent of Democrats and 77 percent of Republicans said they favored the plank of the Inflation Reduction Act that authorizes negotiations.
But Mr. Biden and his fellow Democrats face the challenge of drawing attention to the negotiation program. In a KFF survey in July, only a quarter of Americans were aware of its existence.
Democrats have been trying to do away with the provision that barred direct negotiations with drugmakers since it was first written into law in 2003, when President George W. Bush signed legislation that created the Medicare Part D program to cover prescription drugs taken at home.
On Tuesday, Senator Amy Klobuchar, Democrat of Minnesota, gave credit to Mr. Biden and the AARP, which represents older Americans and ran an aggressive advertising campaign in support of getting rid of the prohibition on negotiations. She called that provision “a sweetheart deal” for the pharmaceutical industry.
Ms. Klobuchar, who is running for re-election in 2024, said the Inflation Reduction Act would figure prominently in her campaign.
“We know that 80 percent of the public is with us,” she said.
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