Sales of existing homes fell more sharply than expected in June as the housing industry continued to be bruised by the worst slump in more than two decades. The National Association of Realtors reported that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That's more than double the expected decline. It leaves sales 15.5 percent below where they were a year ago. The drop in sales pushed inventories of unsold single-family homes and condominiums to an 11.1-month supply at the June sales pace, the second-highest level in the past 24 years. The Houston market saw a 12.6 percent year-over-year decline in existing home sales, according to the Houston Association of Realtors. Sales dropped in all regions of the country except the West, which posted a one percent sales increase. Sales fell by 6.6 percent in the Northeast, 3.4 percent in the Midwest and 3.1 percent in the South. The nationwide median price for a home sold in June has dropped to $215,100, down by 6.1 percent from a year ago. That was the fifth largest year-over-year price drop on record. The median sales price in Houston for June was $154,900—an increase of 1.9 percent on a year-over-year basis.
Next stop is the Senate for legislation to give the housing sector a lift. By a vote of 272-152, the House passed legislation that aims to help 400,000 homeowners facing foreclosure, while supporting mortgage giants Fannie Mae and Freddie Mac. The measure is on track to pass the senate and become law within days. President Bush dropped his opposition hours before the house gave its approval. The White House had been opposed to nearly $4 billion in grants for devastated neighborhoods.
House Republicans have killed a Democratic effort to release 70 million barrels of oil from the government's emergency stockpile. Democrats hoped the extra oil would have helped lower pump prices right away. Their bill would have forced the Energy Department to release the oil from the Strategic Petroleum Reserve. That stockpile now holds 700 million barrels of oil in reserve. The 70 million barrels is about a three-day supply for the United States. Democrats said it would have meant immediate relief at the pump--just as releases did in 1991, 2000 and 2005. The bill won a clear 268-157 majority Thursday. But it still lost because Democratic leaders brought up the bill under terms requiring a two-thirds vote to pass.
Hurricane Dolly probably doomed South Texas's cotton and sorghum crops already damaged by heavy rains earlier in the summer. Analysts say the loss could be devastating for local producers but that it will have only a short-term effect on the markets. About 92,000 acres of cotton in the region was awaiting harvest until driving rains and high winds stained the cotton and drove the bolls to the ground, where harvest becomes useless. Even if the bolls had remained on the plants, the resulting cotton cloth's quality would have been severely diminished. No firm figures will be available on the damage until after Dolly passes and cotton producers are able to get back in their fields.
The Mississippi River is closed to ship traffic from New Orleans to the Gulf of Mexico after a barge was split in half in a collision with a tanker, spilling thousands of gallons of heavy oil. The Coast Guard says Wednesday's accident occurred as a tugboat without a properly licensed pilot was pushing the barge. An investigation by the Coast Guard and the National Transportation Safety Board is under way. It was unclear how long the river would be closed to ships. By dawn Thursday, the Coast Guard says an oil sheen extends from New Orleans almost all the way to the Gulf of Mexico about 97 miles away. About 45,000 feet of containment boom has been placed on the river and workers plan to put down another 45,000 feet and use vacuum skimmers to pick up the oil.
Amazon.com enjoyed a strong increase in sales and profit, both topping Wall Street forecasts in the latest quarter. The online retailing giant says its second-quarter profit more than doubled to $158 million. Sales of books, CDs and DVDs rose 31 percent, while electronics and other general merchandise sales rose 58 percent.
The consumer electronics industry is expected to reach $173 billion in sales in 2008 and $183 billion in 2009. Steve Koenig with the Consumer Electronics Association says in a tough economy, consumers turn to entertaining in the home and telecommuting, helping the CE industry flourish while growth rates of other industries stall or decline. Large-screen televisions and flat-panel displays are leading the way.
"Digital displays—flat-panel technologies included, of course—continue to really be the primary revenue driver in the CE industry. That sector's gonna account for about 16 percent, in fact, of overall CE revenues. The reason that it's such a revenue driver is that prices—especially for flat-panel displays—have come down so dramatically over the past several years. And in fact, this year we're expecting another double-digit decline in flat-panel prices. So a lot of consumers out there are deciding now's the time to upgrade to digital television, and more importantly, high-definition TV." Ed: "The transition to digital TV in February—how is that a factor?" "Yeah, that is a factor in all this, this growth that we're seeing in the digital displays arena. The vast majority of U.S. households do not primarily receive TV broadcast signals via an antenna--in fact, our research has shown only about 13 percent of U.S. households. The main reason for buying a flat-panel TV is to get high-definition and to get a flat screen."
The U.S. Consumer Electronics Sales and Forecast shows shipment revenues will grow by 7.3 percent this year.
Continental Airlines, United Airlines, Lufthansa and Air Canada are asking for Department of Transportation approval to form a trans-Atlantic joint venture. And Continental and nine other Star Alliance member airlines filed an application with the DOT for Continental to join a group of nine carriers that already hold antitrust immunity. Star Alliance coordinates flight schedules to permit inter-airline itineraries and frequent-flyer programs.
The nation's largest traditional grocery chain has removed all jalape±o peppers from its stores as a precaution. A Kroger spokeswoman says it decided to halt jalape±os sales after the U.S. Food and Drug Administration reported this week that a Texas distributor was recalling jalape±os because they had the potential to be contaminated with salmonella. She says Kroger removed jalape±os the next day, even though none of its supply was from the Texas distributor. The government is warning against eating fresh jalape±os or products made from them while it continues to investigate a national salmonella outbreak initially linked to tomatoes. Cincinnati-based Kroger operates nearly 2,500 supermarkets and multi-department stores in 31 states.