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.

Property Taxes – Fees – Utilities – and HOAs $2000.00 a Month or More – at the Tustin Legacy? – Say Goodbye to Food – Cars and College

Tustin, California

Tax district for next Tustin Legacy homes?

Homeowners could pay as much as $2,050 each year on top of standard property taxes to live in the next phase of Tustin Legacy homes due to a special tax district planned for the development.

Tustin Unified School District wants extra tax revenue from that community facilities, or Mello-Roos, district to finance up to $75 million in improvements, including adding two new schools.

Those facilities are needed to serve the thousands of residents expected to move over the next two decades to Tustin Legacy, a master-planned community of homes and retail that’s being built on former Marine Corps Air Station property.

A large portion of that $75 million will be used to build a secondary school in two phases. First will come a junior high, with sixth through eighth grades. Next will come a high school.

The secondary school will be a magnet Technology, Innovation and Entrepreneurship Academy, according to plans supported by the TUSD board during a study session Monday. Curriculum will be focused on project-based learning, with technology courses covering video game design, robotics and coding, while business classes will cover topics such as leadership and creating a small-business plan.

Another significant chunk of the $75 million would be used to finally open and expand Heritage School, a 10-acre campus at 15400 Lansdowne Road that will be developed as a feeder to the magnet secondary school.

The elementary campus was built a few years ago, but TUSD says not enough school-age kids have moved into the Legacy community yet to justify starting classes there. Instead, the district has hosted adult students and administrator offices at the $12 million campus since 2013.

That decision angered local families, who said their children were being sent out of the area to overcrowded schools. And it prompted the city of Tustin to sue the school district in 2011, though a judge ruled that TUSD had the right to delay the school opening.

Figures presented during Monday’s meeting show that many schools are now bursting at the seams, with more residents coming soon.
The new Mello-Roos tax supported by the board Monday would apply to all homes built on vacant land roughly between Jamboree Road and Red Hill Avenue, east of Barranca Parkway and west of Edinger Avenue.

Owners of single-family homes there will pay from $1,325 to $2,050 in extra taxes for up to 40 years, depending on the size of the home. Townhome owners will pay from $875 up to $1,250 in taxes each year, while apartment owners will pay $600 and low-income homeowners will pay $215.

The district plans to hold a public hearing April 20 on forming the Mello-Roos district, which doesn’t require voter approval since no residents live there yet. Before that hearing, a TUSD team will draft a report on what new facilities are needed to accommodate growth for Tustin Legacy and how much those developments are estimated to cost.

The district is expected to vote on the plan May 18. Then it would head to the City Council for final approval May 19, since Tony Soria, chief financial officer for TUSD, said a small portion of the tax revenues would potentially support other public infrastructure needed in the area.

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An airship company is suing the Navy for $65 million stemming from the 2013 roof collapse of a Navy blimp hangar in Tustin California – MCAS Tustin – that destroyed an experimental airship

Tustin, California –

An airship company is suing the Navy for $65 million stemming from the 2013 roof collapse of a Navy blimp hangar in Tustin that destroyed an experimental airship.

In a complaint filed Monday in federal district court, Aeros Aeronautical Systems claims the Navy knew 16 years before the incident that the roof of the massive wooden structure was unstable.

“They had not done anything done about it,” James Gallagher, a Los Angeles attorney representing Aeros, said Wednesday.

The Navy and the Department of Justice, representing the Navy in the lawsuit, didn’t respond to requests for comment.

Aeros leased a third of the 1,000-foot hangar in 2009. With funding from the Department of Defense and NASA, Aeros crews spent the next few years developing Aeroscraft. The rigid airship drew headlines for its buoyancy technology, which allowed the 266-foot ship to land just about anywhere, plus its potential for carrying heavier cargo than any plane or helicopter.

In early October 2013, Aeros officials say a piece of wood fell from the World War II-era hangar and engineers were called to assess the structure. A week later, a 25-foot chunk of the roof fell 17 stories, with some debris puncturing the aircraft.

At the time, officials said the cause of the collapse was unknown. The Aeros lawsuit alleges delayed maintenance was to blame.

The Navy built the hangar and a twin structure to the south in 1942 to store planes and blimps during World War II. Helicopters were also kept there during the Korean and Vietnam wars.

The Tustin Marine Corps Air Station was shuttered in 1999, with most of the land transferred to Tustin. But the Navy hung onto the hangars, with plans to eventually hand the north one off to Orange County and the south one to Tustin.

Through public records requests, Gallagher said his team learned the Navy paid a structural engineering firm to assess the roof of the hangar in 1997.

“They had come back with a report that said there was a certain area of roof that was in need of critical repair,” Gallagher said, recommending repairs be made within two years. In 2013, Graham said, “That is the precise part of the roof that collapsed.”

The Navy blocked access to the hangar for eight months, Gallagher said, fearful more of the roof might come tumbling down. When Aeros was allowed back inside, the company declared Aeroscraft a total loss.

Aeros filed a claim for damages, but the Navy denied the claim in December. No reason was given, Gallagher said.

“For the past 17 months, we have attempted to address damages arising from a clear dereliction of duty as quietly as possible,” Aeros CEO Igo Pasternak said in a statement. “However, the Navy’s unwillingness to resolve the issue in a timely manner is now delaying a long-sought airlift capability that holds promise to solve complex logistics problems, save significant taxpayer money and save lives following natural disasters.”

The lawsuit asks for at least $65 million in property damages, plus a portion of a $3 billion financing campaign Aeros claims was derailed by the roof collapse. Aeros says it hoped to fund a fleet of cargo-carrying airships to help with military, commercial and humanitarian efforts.

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