Wells Fargo Reports The Ups and Downs of Home Sales


Wells_Fargo_Securities_logoNew Homes Sales Jump 12.4 Percent in July

New home sales took off in July, as strong job growth, low mortgage rates and increased construction brought buyers back in droves. The South accounted for most of the gain, with sales surging 18.1 percent.

Momentum Is Shifting Back Toward New Homes

  • Momentum is finally shifting back toward the new home market, particularly in the South, which has seen job growth surge this past year. Overall sales rose 12.4 percent in July, following a 1.7 percent gain in June. Sales through the first seven months of 2016 are up 12.4 percent from one year ago.
  • Home sales also rose solidly in the Northeast, surging 40 percent in July, and inched 1.2 percent higher in the Midwest.

Home Sales Heat Up in the South

  • While the Northeast posted the largest percentage gain in July, that region accounts for the smallest share of new home sales. The South accounts for well over half of all new home sales and has seen sales and new construction take off this year as job growth and in-migration have strengthened.
  • Home price appreciation moderated in July, likely reflecting the shift in sales to lower priced markets in the South.

New Homes Sales Jump 12.4 Percent in July New Homes Sales Jump 12.4 Percent in July New Homes Sales Jump 12.4 Percent in July New Homes Sales Jump 12.4 Percent in July

Existing Home Sales Stumble in July

Existing home sales fell 3.2 percent in July, following four consecutive monthly gains. Home sales continue to have trouble accelerating, reflecting a lack of inventories, appraisal issues and affordability challenges.

Tight Inventories Restrain Existing Home Sales

Existing home sales fell 3.2 percent in July to a 5.39-million unit annual pace (Top Chart), with sales of single-family homes falling 2.0 percent and sales on condominiums and co-ops tumbling 12.3 percent. Both declines marked the first drops since February.

While sales came in below expectations, the lower figures appear to have more to do with a lack of inventories than they do a lack of demand. Overall sales, which reflect closings, are down 1.6 percent from their year ago level. The number of homes available for sale, however, is down a whopping 5.8 percent from its already historically low level. As a result, homes are selling quickly. The average home stayed on the market for just 36 days and 47 percent of homes sold in July were on the market for less than one month.

On a regional basis (Middle Chart), the Northeast saw the sharpest drop, with sales plunging 13.2 percent. Sales fell 5.2 percent in the Midwest and declined 1.8 percent in the South. Sales rose in the West, however, climbing 2.5 percent. The West is home to many of the nation’s hottest housing markets, including Denver, the San Francisco Bay area and Seattle, all of which saw listings remain on the market for a median of just 32 days.

The big drop in the Northeast is likely due to a slowdown in international buyers in New York City. All-cash sales accounted for 21 percent of transactions in July, down from 22 percent in June and 23 percent one year ago. Cash sales, which are primarily investors and international buyers, accounted for the smallest share of overall sales since November 2009. Distressed sales also continued to decline. Foreclosures and short sales accounted for just 5 percent of sales in July, down from 6 percent in June and 7 percent one year ago.

While the overhang of distressed properties has largely cleared the market, the housing crash still casts a large shadow over the housing market, making it difficult for the housing market to rev completely back up. Mortgage underwriting remains stricter than it has in the past and appraisals are often too cautious as well. New home construction has also been slow to come back online, worsening supply constraints.

Moreover, the reluctance of homeowners to put their homes on the market has meant that home prices have risen much faster than income growth, which has reduced housing affordability, particularly in rapidly growing parts of the country such as the West Coast and parts of the Southeast (Bottom Chart). The run-up in home prices has also made it difficult for appraisers to evaluate properties. With many homes selling at or above asking prices, homes are often not appraising at high enough values to qualify for a mortgage, which has led to delays in closings.

Existing Home Sales Post Fourth Straight Monthly Gain Existing Home Sales Post Fourth Straight Monthly Gain Existing Home Sales Post Fourth Straight Monthly Gain

TRIP Reports: Extending the Mon-Fayette Expressway and Busway East (E/BEE): Reducing Traffic Congestion, Enhancing Economic Vitality, Improving Public Safety, and Accommodating Desirable Development in the Mon Valley in the Pittsburgh Area

TRIP Reports: Extending the Mon-Fayette Expressway and Busway East (E/BEE): Reducing Traffic Congestion, Enhancing Economic Vitality, Improving Public Safety, and Accommodating Desirable Development in the Mon Valley in the Pittsburgh Area

Executive Summary

Improving the efficiency of a region’s transportation system by expanding the capacity of highways, transit and intermodal facilities has been found to be an effective way to enhance economic development opportunities and improve quality of life.

  • This report looks at the impact of the proposed 13-mile extension of the Mon- Fayette Expressway from PA-Route 51 to I-376 in Monroeville as proposed by the Pennsylvania Turnpike Commission.
  • This report also looks at the benefit of the extension of the Martin Luther King Jr. Busway East by 2.8 miles from its current terminus in Swissvale to the extended Expressway in East Pittsburgh as a separate project.
  • The proposed busway extension would include a park-and-ride lot at the Busway’s junction with the Expressway. The proposed busway extension would be a separate project of the Port Authority of Allegheny County (PAT). PAT is currently undertaking a feasibility study of the busway extension.

The key findings of the report include:

The proposed extension of the Mon-Fayette Expressway and the extension of Busway East (E/BEE) will play a critical role in enhancing economic development opportunities in the Mon Valley by improving transportation access in the region.

  • The E/BEE would extend the Mon-Fayette Expressway 13 miles from PA-Route 51 to I-376 in Monroeville and extend the Martin Luther King Jr., Busway East 2.8 miles from its current terminus in Swissvale to the extended Expressway in East Pittsburgh.
  • The Expressway proposal replaces an earlier proposal that included the Expressway expansion to Monroeville and a second additional Expressway spur heading west into central Pittsburgh.
  • The Federal Highway Administration is currently conducting a re-evaluation of the new Expressway proposal.
  • The expanded portion of the Expressway would be a tolled highway, administered by the Pennsylvania Turnpike Commission, which also administers the existing portion of the Mon-Valley Expressway.
  • The estimated cost of the Expressway is approximately $1.7 billion.
  • The estimated cost of the Busway East is approximately $100 million.

The benefits of the Expressway completion include:

  • The improvement of access and mobility in the economically distressed Mon Valley area, including industrial brownfield sites in Duquesne, McKeesport and Keystone Commons in East Pittsburgh. This would result in increased economic development opportunities along the corridor.

The completion of the entire Mon Valley Expressway system from I-68 in West Virginia to I-376 in Monroeville

The benefits of the Busway East extension include:

  • The improvement of mobility between East Pittsburgh and Oakland
  • Improved transit access from the proposed Expressway project north of PA Route 51 as well as completed sections south of PA Route 51.
  • Significantly enhanced transit access for the Monroeville, East Pittsburgh and Duquesne areas and communities located along the Expressway and busway extension.
  • Some traffic congestion relief on the Parkway East.
  • Construction of the Mon-Fayette Expressway or construction of the combined Expressway and Busway (E/BEE) will significantly reduce travel time in key travel corridors in East Pittsburgh.
  • The following chart indicates one-way travel times between key destinations in East Pittsburgh using the current transportation system, estimated one-way travel times with completion of either the Expressway extension or the combined Expressway/Busway extension (E/BEE) and reductions of one-way travel times as a result of improved transportation in the region:
Travel time improvements with Mon-Fayette Expressway Extension (in minutes)
From/To Current With Extension Time Savings
Monroeville Convention Center / East Pittsburgh 20 7 13
East Pittsburgh / Duquesne 17 3 14
Duquesne / Monroeville Convention Center 30 10 20


Travel time improvements with E/BEE (in minutes)
From/To Current With Extension Time Savings
East Pittsburgh / Pittsburgh 30 20 10
Duquesne / Pittsburgh 30 20 10
  • The selection of travel destinations is based on access of major Mon Valley economic assets to Monroeville. The City of Duquesne is the location of City Center Industrial Park and Keystone Commons is located in East Pittsburgh. The travel distance from Duquesne to Monroeville on existing roads is nine miles; from East Pittsburgh to Monroeville is four miles; and from East Pittsburgh to Duquesne is six miles. Existing roads include multiple traffic lights and two lane roads over and around hilly terrain that can compromise travel safety, particularly in winter months.
  • Traffic congestion in the Pittsburgh urban area causes 45 million hours of delay annually — an average of 39 hours per commuter — at an annual cost of approximately $1 billion in the value of lost time and wasted fuel.

Completion of the Mon-Fayette Expressway and the extension of the Busway East (E/BEE) would stimulate the development of underutilized property in the Mon Valley region and significantly improve mobility and connectivity in the Mon Valley and surrounding areas, improving access to jobs for the area’s residents.

  • The Expressway would improve access for the 1,500 current manufacturing and related firms in the Mon Valley that employ approximately 22,000 people and help to retain and grow these companies.
  • The Expressway would provide direct access to 1,000 acres of brownfield redevelopment sites including Duquesne City Center and Keystone Commons.
  • The Expressway extension would serve as the crucial eastern leg of the Southern Beltway system.
  • The Expressway would promote just-in-time production and shipping. In a survey of Mon Valley firms, 71 percent of the respondents said they would use the Expressway.
  • The Expressway would increase employment by existing firms. Twenty-five percent of Mon Valley firms surveyed said they would hire additional employees if the Expressway was completed.
  • The Expressway would improve access for intermodal commerce at facilities such as the Norfolk Southern Pitcairn Intermodal Terminal.
  • The E/BEE would promote community redevelopment in Mon Valley communities including infill development and transit-oriented development.
  • Good highway access is critical for manufacturers or companies reliant on goods distribution. Of the $1.1 trillion of goods shipped annually from and to sites in Pennsylvania, 79 percent were transported by truck and 14 percent were shipped by multiple modes, including trucks.

The completion of the Mon-Fayette Expressway and the extension of the Busway East (E/BEE) would create numerous jobs during the estimated four-year construction phase as well as numerous long-term jobs created as a result of both projects.

  • Based on the most recent estimate of the employment impacts of highway and transit investment generated by the Council of Economic Advisors (CEA) with the Executive Office of the President, TRIP estimates that the construction of the Expressway and Busway Extension (E/BEE) would support approximately 5,850 jobs annually in the construction and related sectors over a four-year period.
  • The following chart provides employment estimates during the four-year construction period anticipated for completing the Expressway and Busway extensions.
Annual Jobs Created
Total Construction Cost (Over 4-Year Period)
Construction of Mon-Fayette Expressway Extension $1.7 Billion 5,525
Construction of Busway East Extension $100 Million 325
Construction of E/BEE $1.8 Billion 5,850
  • Based on the Transportation Research Board’s extensive analysis of the impact of improved transportation access on employment, TRIP estimates that the completion of the E/BEE would result in the creation of approximately 20,880 long-term jobs: including 12,960 long-term jobs along the E/BEE corridor and approximately 7,920 jobs outside of the E/BEE corridor.
  • The following chart provides estimates of long-term jobs created by the completion of the E/BEE:

The need for the Mon-Fayette Expressway was born of the historic and unprecedented economic challenges encountered by the Mon River corridor.

  • Fifty years ago, the Mon Valley suffered the shutdown of the US Steel Donora Works, the first integrated steel mill in the United States to close. In the mid- 1980s, the entire corridor saw the near-collapse of basic manufacturing.
  • While there has been significant economic progress in Pittsburgh and southwestern Pennsylvania, the ramifications of the economic losses in the 1960s and 1980s still reverberate in the Mon Valley.
  • The improved access provided by the E/BEE will be crucial to the redevelopment of Mon Valley communities and will attract and promote economic development in the region.

According to a 2012 national report, “Interactions Between Transportation Capacity, Economic Systems and Land Use,” prepared by the Strategic Highway Research Program for the Transportation Research Board, improved access as a result of highway and transit capacity expansions provides numerous regional economic benefits. Those benefits include higher employment rates, higher land value, additional tax revenue, increased intensity of economic activity, increased land prices, and additional construction as a result of the intensified use.

  • The report, reviewed 100 projects, costing a minimum of $10 million, which expanded transportation capacity either to relieve congestion or enhance access.
  • The projects analyzed in the report were completed no later than 2005 and included a wide variety of urban and rural projects, including the expansion or addition of major highways, beltways, connectors, bypasses, bridges, interchanges, industrial access roads, intermodal freight terminals and intermodal passenger terminals.
Long-Term Jobs Long-Term Jobs Total Long-Term
Construction of Mon-Fayette Expressway Extension Created in Corridor 12,240 Created Outside Corridor 7,480 Jobs Created 19,720
Construction of Busway East Extension 720 440 1,160
Construction of E/BEE 12,960 7,920 20,880
  • The expanded capacity provided by the projects resulted in improved access, which resulted in reduced travel-related costs, faster and more reliable travel, greater travel speeds, improved reliability, and increased travel volume.
  • The report found that improved transportation access benefits a region by: enhancing the desirability of an area for living, working or recreating, thus increasing its land value; increasing building construction in a region due to increased desirability for homes and businesses; increasing employment as a result of increased private and commercial land use; and, increasing tax revenue as a result of increased property taxes, increased employment and increased consumption, which increases sales tax collection.
  • The report found that benefits of a transportation capacity expansion unfolded over several years and that the extent of the benefits were impacted by other factors including: the presence of complementary infrastructure such as water, sewer and telecommunications; local land use policy; the local economic and business climate; and, whether the expanded capacity was integrated with other public investment and development efforts.
  • For every $1 million spent on urban highway or intermodal expansion, the report estimated that an average of 7.2 local, long-term jobs were created at nearby locations as a result of improved access. An additional 4.4 jobs were created outside the local area, including businesses that supplied local businesses or otherwise benefited from the increased regional economic activity.
  • The report found that highway and intermodal capacity projects in urban areas created a greater number of long-term jobs than in rural areas, largely due to the more robust economic environment and greater density in urban communities.

The efficiency of a region’s transportation system, particularly its highways, is critical to the state’s economy. Businesses are increasingly reliant on an efficient and reliable transportation system to move products and services. A key component in business efficiency and success is the level and ease of access to customers, markets, materials and workers.

  • Businesses have responded to improved communications and greater competition by moving from a push-style distribution system, which relies on low-cost movement of bulk commodities and large-scale warehousing, to a pull-style distribution system, which relies on smaller, more strategic and time-sensitive movement of goods.
  • Increasingly, companies are looking at the quality of a region’s transportation system when deciding where to re-locate or expand. Regions with congested or poorly maintained roads may see businesses relocate to areas with a smoother, more efficient and more modern transportation system.
  • Highway accessibility was ranked the number two site selection factor behind only the availability of skilled labor in a 2015 survey of corporate executives by Area Development Magazine.
  • The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs and reduced emissions as a result of improved traffic flow.


Tom Ewing: Environmental Update

Editors / Directors:

  • It started out as a sleeper but it’s moved close to the top of Regulation.gov’s “what’s trending” list: In June the Coast Guard proposed new anchorage grounds in the Hudson River from Yonkers, NY, upriver to Kingston, about 90 miles. The concerns: navigation safety and traffic flow. At this writing, over 1000 comments are in the docket, presenting a classic tangle about how a working river and freight corridor should be used – or not used, perhaps placed off-limits from activities considered, by some, as too risky and, well, too old-school. This is moving from NIMBY (not in my backyard) to DETAI (don’t even think about it).
  • Bird's-eye_view_of_Hudson_River_from_walkway_5
  • There’s no free lunch: EIA reports that CO2 from natural gas will soon surpass CO2 from coal, because of the big shift in fuel usage. (Proportionately, of course, there’s less CO2 because of the nature of the two fuels.) This raises questions – how long can natural gas bridge from coal and petroleum to _______ ? At last month’s National Petroleum Council meeting DOE Secretary Moniz placed a lot of faith in Big Innovation (his term: “mission innovation”, but it’s gonna have to be big..!) an international effort to double worldwide energy R&D from $15 to $30 billion in the next five years. It takes a lot of work to change the temperature of a planet…
  • Last week, DOE presented its “Federal Alternative Jet Fuels Research and Development Strategy,” an important document, hopefully not too late. It’s from the White House and it’s supposed to coordinate executive agency work. I first saw reference to it in a May, 2014, GAO report. To be honest the lengthy new doc recounts a lot of old work, work that so far hasn’t produced much fuel, just plenty of headlines. (More on this after a closer look.)

Need research/reporting/writing help?

Have a great Monday and a great week!

Tom Ewing

513-379-5526 voice/text

Voters Feel Nation’s Infrastructure Needs Attention

Baby & GBy:  Greg Sitek

Days are flying by at a record-breaking pace as the presidential candidates race to the finish line in what, in my opinion, is the most vicious campaign since I was first eligible to vote. No, it wasn’t Lincoln vs. Douglas.

There are almost as many issues as there are dollars in our national debt. Among them is our infrastructure. A failing infrastructure is not conducive to growing a strong economy. Both parties recognize this face and have addressed it in campaign rhetoric.

With 90 days left before Election Day, a national poll released recently by the Association of Equipment Manufacturers (AEM) found that half of registered voters say the nation’s infrastructure has gotten worse over the last five years, and a majority of voters said roads and bridges are in “extreme” need of repair.

The findings were part of a new national poll commissioned by AEM to gauge voter perceptions and attitudes about the current and future state of U.S. infrastructure amid a high-profile election. The poll found that registered voters, regardless of political affiliation, recognize the declining state of the nation’s infrastructure as an issue that should be addressed and believe that the federal government should do more to improve infrastructure across the board.

“Americans across the political spectrum understand the dire state of U.S. infrastructure and believe that the federal government should do more to improve our infrastructure,” said Dennis Slater, president of AEM. “Voters recognized that increased federal funding for assets such as roads, bridges, and inland waterways will have a positive impact on the economy, and they are looking to the federal government to repair and modernize.”

The national poll identified a number of key findings, including:

• Nearly half (46 percent) of registered voters believe that the state of the nation’s infrastructure has gotten worse in the last five years.

• A significant majority (80 – 90 percent) of registered voters say that roads, bridges and energy grids are in some or extreme need of repairs.

• Half (49 percent) of the surveyed population feel that the federal government is primarily responsible for funding repairs to the nation’s infrastructure.

• Seven out of every 10 registered voters say increasing federal funding for infrastructure will have a positive impact on the economy.

• More than eight out of every ten Americans consider water infrastructure (86 percent), solar powered homes (83 percent) and smart infrastructure (82 percent) as the top three important innovations for the future of infrastructure.

• Voters across the political spectrum think that the federal government should do more to improve the nation’s overall infrastructure, with 68 percent of Republicans, 70 percent of Independents and 76 percent of Democrats sharing this sentiment.

Registered voters also feel that government across the board should be doing more to improve the nation’s overall infrastructure, with 76 percent of individuals surveyed wanting more from state governments, 72 percent looking to the federal government to do more and 70 percent expecting more from local governments.

“Both presidential nominees have voiced their strong support for infrastructure investment,” says Ron DeFeo, CEO of Kennametal and chairman of AEM’s Infrastructure Vision 2050 initiative. “The specific ideas and proposals they offer over the next 90 days will be critically important, and voters should consider them carefully on Election Day.”

Currently, there are 4.12 million miles of road in the United States, according to the Federal Highway Administration, including Alaska and Hawaii. The core of the nation’s highway system is the 47,575 miles of Interstate Highways, which comprise just over 1 percent of highway mileage but carry one-quarter of all highway traffic. The Interstates plus another 179,650 miles of major roads comprise the National Highway System, which carries most of the highway freight and traffic in the U.S. Most of the roads in the U.S., 2.94 million miles, are located in rural areas, with the remaining 1.18 million miles located in urban areas. Local governments are responsible for maintaining and improving 3.18 million miles of road or 77.3 percent of the total. State highway agencies are responsible for over 780 thousand miles of road, or 19.0 percent. The federal government is responsible for only 150 thousand miles of road or 3.7 percent, largely roads in national parks, military bases and Indian reservations. Of the 4.07 million miles of road, about 2.68 million miles are paved, which includes most roads in urban areas. However, 1.39 million miles or more than one-third of all road miles in the U.S. are still unpaved gravel or dirt roads. These are largely local roads or minor collectors in rural areas of the country. (Source: Highway Statistics 2013 Table HM-20, HM-10, HM-12, HM-15, VM-202)

You don’t like the way things are going?

Do something about it!


Just because you vote don’t think your job is done. Keep track of your representatives in local, state and federal government.

Remember they work for you. You pay their salaries and benefits, and they are well paid. Make them accountable and communicate with them regularly. It is your country.

Additional information is available at: The Atlantic – Donald Trump’s Big-Spending Infrastructure Dream

FORTUNE – Both Republicans and Democrats Want More Infrastructure Spending Now

The Hill – Poll: Dems, GOP agree infrastructure worsening

AEM – www.aem.org

Site-K Construction Zone http://www.site-kconstructionzone.com/?p=12782

Washington Report By Sam Quigley

Washington Report