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.

http://www.usatoday.com/story/money/business/2016/02/24/new-home-sales-housing-market/80849626/

Rat running – cut-through driving or a Tustin Legacy 500 Million Dollar Shortcut – is using secondary roads – residential streets – shopping mall throughways – instead of the intended main roads in urban or suburban areas

Tustin, California –

Tustin Legacy 500 Million Dollar Shortcut

Rat running, cut-through driving or a shortcut, is using secondary roads, cemetery roads, or residential side streets instead of the intended main roads in urban or suburban areas.

People do it to avoid heavy traffic, long delays at traffic signals or other obstacles, even where there are traffic calming measures to discourage them, or laws against taking certain routes.

Rat runs are frequently taken by motorists familiar with the local geography.

They will often take such short cuts to avoid busy main roads and intersections.

https://www.google.com/maps/place/Tustin,+CA+92782/@33.719702,-117.8117934,14z/data=!4m2!3m1!1s0x80dcdc10336eb46d:0xe776cdd463e6d6b9

http://en.wikipedia.org/wiki/Rat_running

The boom is bust – Higher housing costs fewer births more deaths slow O.C. to a crawl – Home prices to blame

The boom is bust: Higher housing costs, fewer births, more deaths slow O.C. to a crawl

Orange County’s population growth is little more than a trickle these days, according to figures released this week by the U.S. Census Bureau.

Throughout most of the 1970s and ’80s, the ethnically diverse mass of people calling Orange County home ballooned by more than 2 percent annually. In 1975, more than 56,000 people were added, by birth or moving here – a 3.4 percent bump from the previous year.

But last year, population grew by just 23,600, less than 1 percent – the sixth-slowest rate in the past half-century of census data. The only years with less growth preceded the national economic recession.

The primary reasons, in Census Bureau parlance, are domestic migration patterns and deaths. In plain English, more people are leaving Orange County for other parts of the U.S. than are coming to live here. And our increasingly elder population is dying off faster than babies are being born.

Though the net change in migrants from other countries grew by 29 percent in 2014 from the previous year, much of that growth was wiped out by a domestic exodus. About 8,000 more residents left Orange County than new ones arrived here.

Home prices to blame

Urban planning and real estate experts said rising home prices may be partially to blame. Orange and Los Angeles counties both lost residents to domestic migration, while Riverside County, with cheaper housing options, continued rapid growth in 2014.

Orange County home prices have continued a steady climb in recent months, according to CoreLogic DataQuick figures, nearly reaching prerecession levels. In February, the median home price was about $571,000 in Orange County, compared with $305,000 in Riverside County.

“Even though there’s more construction, we still hear the issue of housing prices,” said Deborah Diep, director of the Center for Demographic Research at Cal State Fullerton. “It’s been a huge ongoing issue, not just for Orange County but for the whole Southern California region.”

The new data don’t spell out exactly where Orange County residents are moving and why they’re moving. More detailed data won’t be released until later this year.

Work here, live elsewhere

Wallace Walrod, a chief economic adviser for the Orange County Business Council, cautioned against drawing too many conclusions from the new report. Population estimates sometimes later are revised because of changes in the Census Bureau’s statistical methods.

But Walrod said the data match up with other economic trends. Noting that Orange County’s unemployment rates remain lower than other Southern California counties, he said more residents may be choosing to work in Orange County and live elsewhere.

“The No. 1 reason that people move is typically for jobs,” Walrod said. “But I think it is mostly about housing prices.”

Karen Edmonds, president of Fullerton-based Winkelmann Realty, said one of her clients, an out-of-state family with four children, recently was looking for a home in Fullerton on a $650,000 budget. It turned to Corona instead. Getting to work and other regional attractions would take longer, but the family also could find a bigger home for thousands less.

The last time Orange County’s annual population growth fell below 1 percent was before the national housing market collapsed. Median home prices skyrocketed then, peaking at $642,000 in August 2007.

Pressure for services

Whether population expands or shrinks might sound like a dry subject. But it influences how much federal funding flows in the county and gets fed into public policy debate and business decisions.

For example, more older residents will put greater pressure on some economic sectors, such as health care, while reducing demand for others like child care and schools.

Geographic shifts in residential population also can strain the transportation system – such as increasing the number of freeway commuters – and cut sales tax revenue that many government agencies rely on to fund core public services.

And as young adults decide to put off having a family – or move outside the county – that affects demand for home furnishings and various services. In a story last year, the Register reported that Orange County had added about 7,500 households a year since 1990, but average growth fell to 2,700 households a year from 2009 on.

“People tend to do most of their retail shopping close to where they live less than where they work,” Walrod said. “That’s the other thing we’re losing out on when people choose to still work in Orange County but live in Riverside or San Bernardino.”

With about 3.15 million residents, Orange County’s population is the third-largest in California – behind Los Angeles and San Diego counties – and larger than 22 states.

Deaths are up 11%

Stagnant birth rates and substantially more deaths also have pushed Orange County toward slower population growth in recent years, the new census data show.

Last year, the bureau estimated nearly 2,000 more deaths in the county than three years earlier, an 11 percent climb.

The trend follows previous census figures that show Orange County increasingly has become a home for people over 45. From 2000 to 2010, the number of residents ages 45 and older grew by 29 percent, while the number of younger residents fell by 4 percent.

The growing population of seniors presents new challenges for social service agencies aiming to cut health care costs. The county Office on Aging has programs that deliver meals to seniors and help seniors attend medical appointments in an effort to prevent them from entering managed care prematurely, said director Karen Roper.

“If you’re getting seniors to doctors and helping them remain healthy, people can stay at home,” Roper said. “The best quality of life is certainly not in skilled nursing (facilities). It’s extremely expensive and not the best place to age with dignity.”

Contact the writer: kkyle@ocregister.com Twitter: @keegankyle

http://www.ocregister.com/articles/county-655991-orange-home.html