Americans stepped back from buying new homes in January, as purchases plunged sharply in western states where prices are typically higher

New-home sales tumble in January on big decline in West

WASHINGTON – Americans stepped back from buying new homes in January, as purchases plunged sharply in western states where prices are typically higher.

The Commerce Department said Wednesday that new-home sales fell 9.2% last month to a seasonally adjusted annual rate of 494,000. Most of the decline stemmed for a 32.1% in sales in the West. Sales also slipped in the Midwest, while edging up in the Northeast and South.

The pace of buying new homes last month slipped below last year’s sales total of 501,000, a possible sign of mounting price pressures despite low mortgage rates and job gains that have pushed the unemployment rate down to 4.9%. But new-home sales also tend to be a volatile government report with revisions and large swings on a monthly basis.

The decrease complicates the outlook for residential real estate. Rising demand for existing homes had sparked hopes that builders will ramp up construction and sales of new homes will accelerate. The 14.5% increase in new-home sales last year fed into those expectations. But builders have increasingly focused on the more affluent slivers of the market, while the decline in sales listings of existing homes indicate that many Americans may have lost interest in upgrading to a new property.

A curious price gap appears to have opened up because of these trends. The median new-home sales price fell 4.5% from a year ago to $278,800, likely because of fewer purchases in the West. But the average price — which includes the extremes of the market — has climbed 2.7% from a year ago to $365,700, a difference of nearly $100,000 compared to the median. The increase in the average price has consistently stayed ahead of wage growth, which limits affordability.

New-home sales still lag the historic 52-year average of 655,200. Subprime mortgages helped push up sales as high as 1.28 million in 2005, a peak that ultimately signaled a bubble that burst and pushed the economy into its worst downturn since the depression.

But demand for housing has recovered over the course of the 6 ½-year recovery from the recession.

Sales of existing homes rose 0.4% last month to a seasonally adjusted annual rate of 5.47 million, the National Association of Realtors said Tuesday. That increase comes on the heels of a strong 2015 when sales reached their highest level in nine years. Supply of homes has failed to increase in response to demand, causing the median sales price to rise 8.2 percent from a year ago to $213,800.

The rising prices have raised questions as to whether construction firms will build more homes to fulfill demand.

Housing starts dipped in January amid colder weather. Ground breakings fell 3.8% last month to a seasonally adjusted annual rate of 1.1 million homes, the Commerce Department said in a separate report. But for all of 2015, housing starts totaled 1.1 million, the most since 2007.

Homebuilders see room for further expansion, yet they’re slightly less hopeful.

The National Association of Home Builders/Wells Fargo builder sentiment index dropped to 58 in February, a decrease of three points from January. The index had stayed in the low 60s since June. Readings above 50 indicate more builders view sales conditions as positive.

Water Districts and City Hall Never Saw a Drought and Price Increase They “Didn’t” Like – Nobody “Needs” California Almonds – Court Rules “tiered water rates are unconstitutional” – Thank You Jim Reardon

In a ruling with major implications for California’s water conservation campaign, a state appeals court on Monday ruled that a tiered water rate structure used by the city of San Juan Capistrano to encourage conservation was unconstitutional.

The Orange County city used a rate structure that charged customers who used small amounts of water a lower rate than customers who used larger amounts.

But the 4th District Court of Appeal struck down San Juan Capistrano’s fee plan, saying it violated voter-approved Proposition 218, which prohibits government agencies from charging more for a service than it costs to provide it.

“We do hold that above-cost-of-service pricing for tiers of water service is not allowed by Proposition 218 and in this case, [the city] did not carry its burden of proving its higher tiers reflected its costs of service,” the court said in its ruling.

The stakes are high because at least two-thirds of California water providers, including the Los Angeles Department of Water and Power, use some form of the tiered rate system.

Gov. Jerry Brown immediately lashed out at the decision, saying it puts “a straitjacket on local government at a time when maximum flexibility is needed. My policy is and will continue to be: employ every method possible to ensure water is conserved across California.”

Brown added state lawyers are now reviewing the decision.

It also remains unclear what effect the ruling would have on other agencies that use tiered rates.

The court said that tiered prices are legal as long as the government agency can show that each rate is tied to the cost of providing the water.

San Juan Capistrano resident Jim Reardon is part of a group challenging the city over its tiered water-rate structure.

“The water agency here did not try to calculate the cost of actually providing water at its various tier levels,” the court said of San Juan Capistrano. “It merely allocated all its costs among the price tier levels, based not on costs, but on pre-determined usage budgets.”

The highly anticipated decision comes in the wake of Brown’s executive order directing water agencies to develop rate structures that use price signals to force conservation. His order, which also requires a 25% reduction in urban water usage, marked the first mandatory water restrictions in state history and came as the state enters a fourth year of an unrelenting drought.

A group of San Juan Capistrano residents sued that city, alleging that its tiered rate structure resulted in arbitrarily high fees. The city’s 2010 rate schedule charged customers $2.47 per unit — 748 gallons — of water in the first tier and up to $9.05 per unit in the fourth. The city, which has since changed its rate structure, was charging customers who used the most water more than the actual cost to deliver it, plaintiffs said. The law, they argued, prohibits suppliers from charging more than it costs to deliver water.

The Los Angeles Department of Water and Power currently uses a two-tier rate structure, but agency officials have said they are preparing to roll out a revised system that would employ four tiers and that would make high water use even more costly than it is now.

Experts say 66% to 80% of California water providers use some type of tiered rates. A 2014 UC Riverside study estimated that tiered rate structures similar to the one used in San Juan Capistrano reduce water use over time by up to 15%.

An author of the study, Ken Baerenklau, said the effect was greatest on the heaviest water-users. In a previous interview with The Times, he said that if the court found in favor of the plaintiffs, as it did Monday, the decision “would be a big deal” because it would “stand in the face of significant momentum” toward tiered rates.

California almonds are a popular bagged treat in China’s convenience stores and supermarkets and a must-have item in holiday gift baskets.

As big a global money-maker as California’s agriculture is, though, it’s little more than a blip in the state’s economy. And that’s driving the debate on water use.

Anaheim California – It’s More Than Just Disneyland – It’s Home to the World’s Smartest Police Dogs.

The Anaheim Police Department has hired 13 officers and focused on building ties with the community since a downtown riot last year revealed the broken relationship between Latinos and city government, according to a report presented to the City Council Tuesday night.

The report is intended to provide an update on the Police Department’s improvements since the summer of 2012, when more than 1,000 demonstrators, most Latino, confronted officers after fatal police shootings of two young men.

Newly hired officers are focused on “community policing, gang enforcement and youth services,” the report states.

Critics of the police department say officers disrespect most youth in Latino working-class neighborhoods by assuming they all are gang members, thus undermining a fragile trust with a community that has historically suffered at the hands of police.

Many residents have demanded a civilian police oversight panel as the means to restore trust with the neighborhoods. Mayor Tom Tait has pushed for such a board, but his colleagues have so far resisted efforts to establish one.

The report presented Tuesday lists a number of operational enhancements to address the plight of these neighborhoods.

They include:

Mandatory audio recording of uniformed police officers. Video recording is in the testing phases.

Modifying vehicles to better prevent dogs from accidentally escaping“. LOL

Before last summer’s riot, a police dog was released into a crowd of protesters and overturned a baby stroller. The image was caught on video and shown in news broadcasts.

Increased foot patrols in neighborhoods, as requested by residents.

Continued review of transferring police officers from some areas to others.

Some residents have been angered by the presence of officers in neighborhoods where they have been involved in fatal shootings.

Development of a neighborhood advisory board.

The panel will include residents, who will meet monthly with the police chief to discuss community concerns and building trust.

The establishment of an anonymous complaint portal on the Police Department website.

Compilation of a brochure in coordination with the American Civil Liberties Union that gives residents an understanding of “what members of the public should expect, and what is expected of them during a contact with an officer.”

Assistance in setting up neighborhood watch programs.

Making Cops 4 Kids, a police program for youth, mobile and accessible to children of Anna Drive and Guinida Lane, two neighborhoods hit particularly hard by fatal shootings and gang activity.

Implementing ”Coffee with a Cop” in English and Spanish so residents and police officers can interact in informal settings.

Referring children traumatized by fatal shootings to programs that could ease the psychological impacts.

Expanding the Gang Reduction and Intervention Partnership program, a community-based initiative that involves teachers, police, case managers and others to prevent at-risk youth from joining gangs.

More narrowly defining gang injunctions to address only gang members named in the civil restraining order.