Monday PM August 25th, 2008
by: Ed Mayberry, August 25, 2008 5:08:25 pm
Falling prices have lured some buyers back into the housing market. The National Association of Realtors says sales of previously-owned homes rose 3.1 per cent in July, marking a better-than-expected showing. At the same time, the number of unsold properties rose to an all-time high, suggesting the housing slump is far from over. Home sales were 13 per cent lower than a year earlier. The median price for a home sold in July dropped to $212,000. That is down seven per cent from a year ago. Despite the third monthly sales gain this year, the number of unsold single-family homes and condos rose to nearly 4.7 million. That's the highest since 1968, when the group started keeping track.
The Houston Association of Realtors reports declining property sales, tempered by strong average and median pricing of homes for the 11th consecutive month in July. Sales of single-family homes dropped 12.7 per cent on a year-over-year basis. The average price rose by eight per cent to $226,072. The median price rose 3.4 per cent last month to $161,370.
Canadian oil and natural gas driller Precision Drilling Trust will buy Houston-based gas driller Grey Wolf for $1.12 billion in cash. Precision also will exchange 42 million shares valued at $896.7 million, based on Friday's closing stock price. The companies said the $2.02 billion deal will give Precision land drilling operations in virtually every oil and gas basin in the lower 48 United States and Canada, and an emerging presence in Mexico. Grey Wolf shareholders will receive $5 in cash and 0.1883 newly issued precision trust units for each Grey Wolf common share held. The deal marks a 4.5 per cent increase in the amount of units offered since Precision's last bid.
Twelve states, New York City and the District of Columbia are suing the Environmental Protection Agency, claiming the Bush administration has failed to rein in emissions from oil refineries. New York Attorney General Andrew Cuomo said the suit is aimed at forcing the EPA to adopt new regulations to reduce oil industry pollution that contributes to global warming. Other states in the suit are California, Connecticut, Delaware, Massachusetts, Maine, New Hampshire, New Mexico, Oregon, Rhode Island, Vermont and Washington. The suit was filed in a federal court for the District of Columbia circuit. It is the latest by states critical of the EPA's record.
A railroad car carrying chemicals to make pesticide spilled this morning in Houston, shutting down a major street for several hours and prompting officials to order people away from the area. A shelter-in-place for businesses near the spill was lifted Monday afternoon, with officials hoping to reopen the street a short time later. La Porte Emergency Management coordinator Jeff Suggs says no injuries or illnesses have been reported from the leak on the tracks at the PPG Industries plant. He says the spill is contained and the area is no longer being affected by it.
The Lundberg Survey shows gasoline prices have fallen 15 cents a gallon in the past two weeks. The average price of a gallon of regular at self-serve stations nationally was $3.70 Friday. Mid-grade was at $3.83, and premium was $3.95. Diesel was averaging $3.82. Gas was cheapest in St. Louis at $3.37 for a gallon, and most expensive in Anchorage, Alaska, at $4.34. Despite the drop, gas is almost 95 cents a gallon higher than a year ago. Prices peaked on July 11th at $4.11 for regular.
AAA puts the national average for unleaded gasoline is down to $3.68 a gallon. That is down 43 cents from the high in mid-July.
This year, with gasoline having topped the $4 a gallon mark, one study says there could be fewer than 37,000 traffic fatalities for the first time since 1961. The Transportation Research Institute at the University of Michigan studied traffic deaths from April of 2007 to this past April. In the first ten months, the monthly declines averaged 4.2 per cent compared to the previous year. Then, when gas prices spiked, fatalities dropped 22.1 per cent in March and 17.9 per cent in April of this year. Experts who study those trends say people are reducing their non-essential driving, which is often leisure driving during riskier night and weekend hours. Teenage and elderly drivers, who are also more accident-prone, may also be cutting back more than other drivers because of high gas prices.
Lyondell Chemical subsidiaries Equistar Chemicals and Millenium have agreed to $6.5 million in civil penalties to resolve the state's environmental enforcement action. The Lyondell subsidiaries operate seven petrochemical plants in Houston and along the Gulf Coast. The subsidiaries were charged with repeatedly failing to prevent the release of harmful pollutants into the air.
The chief of BP's American division said that the oil giant is on target to finish replacing and fixing miles of pipeline on Alaska's North Slope. That comes about two years after corrosion-induced leaks crimped the nation's oil supply and prompted harsh criticism of the company. After a massive oil spill in March 2006 and the subsequent discovery of corroding pipes five months later, London-based BP said it would replace 16 miles of the 22 miles of transit pipeline it operates at Prudhoe Bay, the nation's largest oil field. Bob Malone, president and chairman of Houston-based BP America, says the company was on schedule to complete the $260 million project by year's end. He also acknowledged BP still has lots of work to do in Alaska. He says BP continues to test sections of pipeline for corrosion.
California-based Tri-Net Group is entering the Houston market, opening an office in the Galleria area. The human resource services firm provides benefits and payroll services to client companies. The company hires a client's employees and leases them back as a co-employer. The idea is to give smaller companies the scale of benefits offered by larger corporations.
Houston Community College is holding a ribbon-cutting ceremony tomorrow morning for its new Northline Campus on Fulton at Lyerly. The new four-story academic building is the first facility for the new 21-acre campus, with 25 classrooms, two math computer labs, two biology labs, a chemistry lab, a business technology lab, a cosmetology lab, a computer drafting lab and a 10,000-square-foot library. The former Northline Mall Center opened in 1993 with about 50 students, but HCC Northeast now has over 3,500 students.
The Postmaster General says the Postal Service could lose about $2 billion this year due to tough economic times. John Potter told the National Association of Postmasters of the United States at their convention in St. Louis that the Postal Service has to change to meet the demands of the American public. He says the Postal Service is working to control costs and increase business. He pointed to advertising through the mail as an area of potential growth. Earlier this month, the agency said its fiscal 2008 year-to-date net loss totaled $1.13 billion.
A survey by the National Association for Business Economics finds the number one concern of economists is the state of the financial system. That was cited by 46 per cent of the group of 278 members of the economists' trade group. On the rise on the short-term worry list are energy prices and inflation. The economists named the federal deficit and government spending as the top long-term challenge facing the U.S. economy. Only 34 per cent of them questioned said the housing bill approved last month would help hasten the housing recovery.
A busy week is on tap for economic reports. Tomorrow, the Conference Board reports on consumer confidence. The snapshot of new home sales in July is due from the Commerce Department. Also, the minutes are to be released from the Federal Reserve's policy-setting meeting earlier this month. Later in the week, we'll have figures on second quarter growth, jobless claims, and personal income and spending. The Bureau of Labor Statistics this week will release figures on metro area employment and unemployment, youth employment and productivity trends in industry.