The Houston Association of Realtors says the foreclosure and sub-prime crisis remains largely contained within the $80,000 to $150,000 price range, according to August figures. Prices dropped 12.6 percent for single-family homes sales in that range, compared to an 8.3 percent increase for the rest of the market. Luxury homes worth more than $500,000 saw a 26 percent increase in sales. Total property sales for the month registered 8,352—a 1.2 decrease compared to August 2006. Properties sold during the month totaled more than $1.7 billion—a 6.2 increase compared to last year's $1.6 billion in August sales. The median home price reached $159,000 for August—an increase of 4.6 percent. The average family home price is at $215,957—an increase of 8.1 percent.
Offshore companies continue evacuating facilities in the eastern and east-central Gulf of Mexico in preparation for what could be the next big storm. The National Hurricane Center said the storm could develop into a tropical system. Just over one-quarter of the Gulf of Mexico's daily oil production has been closed off--due to weather. The Minerals Management Service says personnel have been evacuated from five of the 834 staffed production platforms in the Gulf. Three of the 89 drilling rigs had been evacuated. The Gulf contains about 4,000 offshore rigs and platforms. Hurricanes Katrina and Rita destroyed more than 100 floating facilities and shut in 92 percent of oil output and 83 percent of natural gas production.
Chevron, ConocoPhillips and BP have been removing non-essential personnel, but will not suspend oil and natural gas production until the storm's path can be better predicted. Anadarko Petroleum removed about 175 workers on Wednesday. Drilling contractors Transocean and Noble removed 300 workers from two contracted drilling rigs. Diamond Offshore has evacuated seven rigs near Louisiana's coast, and may evacuate others today. Shell Oil continued evacuations from drilling rigs and production platforms on Wednesday, bringing around 1,000 workers to shore.
Eight percent more petroleum engineers are graduating next year from the University of Texas and Texas A&M University, according to undergraduate statistics obtained by the Houston Chronicle. A combined 230 petroleum engineers will graduate in 2008—up from 213 this year. Soaring oil prices helped renew interest in an industry that has been having difficulty recruiting new engineers after the 1980s oil bust. General enrollment is up 11 percent at UT and 15 percent at Texas A&M.
Transocean and GlobalSantaFe have been granted early termination of their proposed merger waiting period by the Federal Trade Commission and the U.S. Department of Justice, according to the Houston Business Journal. The companies estimate completion of the deal by year's end. The new entity will be known as Transocean, using the ticker symbol "RIG" on the New York Stock Exchange. It will be the world's largest offshore drilling contractor, with a combined fleet of more than 100 offshore drilling units.
A forward-looking economic signal is flashing a red light. The Conference Board's Index of Leading Economic Indicators dropped 0.6 percent in August, a sign that the housing market slowdown and credit crunch are taking a wider toll. The business research group's measure is intended to forecast economic activity over the next three to six months. Among the ten items that go into the index, only one was higher in August. Earlier this week, the Federal Reserve cut short-term interest rates by a larger-than-expected one-half of one percent, hoping to provide some help to the economy.
Mortgage rates have edged up a bit in the past week. Freddie Mac says the average of 30-year fixed-rate mortgages is 6.34 percent, up from 6.31 percent last week. For fixed-rate 15-year mortgages, the average is 5.98 percent, up from 5.97 percent last week. One-year adjustable rate mortgages were at 5.65 percent, down slightly from 5.66 percent last week.
Norway's state-controlled oil company Statoil is buying 274 automated Jet brand gasoline stations in Scandinavia from Houston-based ConocoPhillips, according to the Houston Chronicle. The price has not been disclosed. The deal must be approved by the European Commission.
Targa Resources Partners is acquiring natural gas gathering and processing businesses from its affiliate company for $705 million, according to the Houston Business Journal. They are located in west Texas and Louisiana—about 2,000 miles of natural gas gathering pipelines.
Houston-based Rio Vista Energy Partners has sold its remaining liquified natural gas assets to TransMontaigne Partners in a $10.5 million deal, according to the Houston Business Journal. Rio Vista has historically been a provider of LNG for distribution to northeastern Mexico.
Home furnishings retailer Bombay Company announced it's filed for bankruptcy protection. Fort Worth-based Bombay says it will keep stores open as it continues to look for a buyer. Bombay also says it will continue to pay employees and suppliers and preserve the benefits of workers. The company will honor customer returns and exchanges. The filing was in federal district court in Fort Worth. Bombay says its Canadian operations will also seek protection from creditors. Chief Executive David Stewart says he's confident that Bombay will emerge from bankruptcy "stronger and more competitive.'' Bombay operates about 380 retail outlets and a Web site.
Round Rock-based Dell plans to open its first store in Moscow early next month. The outlet will sell PCs, server computers and printers. Dell set up an outlet in Budapest, Hungary in April. The stores will sell directly to consumers. Dell abandoned its mainly phone and Internet sales model this year after trailing Hewlett-Packard in computer sales for four straight quarters. The company now also sells computers in the U.S. through Wal-Mart. Russia has about 28 million Internet users.
The Houston Advertising Federation has changed its name to the American Advertising Federation—Houston, aligning itself more closely with the national parent organization. Houston joins other AAF groups in Texas, including Fort Worth, San Antonio and Victoria, in changing the name.
The job market looks healthier than expected. The Labor Department reports the number of workers filing for unemployment has sunk to its lowest level in seven weeks. Last week, there were 9,000 fewer new applications for unemployment benefits than the previous week. It's the lowest level for jobless claims since late July. With the recent turmoil in financial markets and a slump in housing, economists are keeping close watch on the job market to see if the problems are spreading to the economy at large. Many economists now believe the risk for recession has sharply risen. The Labor Department report was unexpected. Analysts had predicted a rise of about 6,000 new applications.
There's word that the issue of retiree health care is being put aside for now in the talks between General Motors and the United Auto Workers. There's been no comment on that from officials. But one person who's been briefed on the talks says the UAW president has decided to temporarily shelve talk about the union taking over retiree health care so other issues can be discussed. The person asked not to be identified by name because the talks are private. GM wants to pay the UAW to set up a trust that would fund future retiree health care costs, but the company and union remain far apart on how much GM would pay. GM, as well as Ford and Chrysler, are trying to cut what they say is about a $25 per hour labor cost gap with their Japanese competitors. The union's contract with GM was due to expire last Friday, but has been extended hour by hour since then.
AT&T plans to announce that it'll make a major investment in broadband cable infrastructure in Florida. The move comes as San Antonio-based AT&T seeks to woo customers from traditional cable companies in the race to beam TV and Internet into homes. Earlier this year, a new state law was passed that makes it easier for telecommunications companies to get into the TV business. The company is expected to announce that its plans include introducing its u-verse television service for some Florida customers. That service transmits television signals over a high-speed, broadband Internet connection. AT&T is the country's largest provider of broadband Internet and land and wireless phone services.
Houston-based Satterfield & Pontikes Construction is one of four companies being issue citations by the U.S. Department of Labor's OSHA following a fatality at a Dallas worksite. The proposed penalty of $119,550 is also being levied against Okie Foundation Drilling and Rent-A-Crane of Oklahoma City and Soto Rebar Construction in Dallas.