Cut price to sell home, area experts say

How do you sell a home quickly in a time of financial turmoil and economic uncertainty?

"Cut the price," say area real estate experts.

It doesn't necessarily have to be a drastic reduction, especially in a stable market like Pittsburgh, where the price of homes sold kept rising in defiance of national trends until a recent slippage.

But no matter what the market is doing, "realistic" pricing is a major part of the answer, experts say.

That was the case involving a split-level house on Greylock Drive in Penn Hills that caught the attention of Josh and Melissa Jones when they started looking for their first home this year.

The couple liked the home, but it wasn't until the owners of the property cut the $129,000-plus asking price to about $116,000 that they seriously considered buying it, said Howard Anderson, an agent with Northwood Real Estate.

Anderson served as a "buyer's agent" for the couple, aiding them in their search for a new home and representing their interests in the sales transaction.

"Josh Jones had driven by it when it was out of their price range, but we kept it on the back burner," Anderson said. "And when it moved into their price range, they made an offer because it was a nice house."

The couple ended up purchasing the home in April, paying $118,000.

"The property had been on the market for five months, but when the owners lowered the price, we had a buyer within four days," said Patricia Wehn, a Howard Hanna Real Estate Services agent who had the property listing.

It's not unusual for people to think their homes are worth more than others do, Wehn said. "But they have to be honest with themselves, price it accordingly and listen to their Realtor who researches everything sold in the neighborhood in the last six months or last year.

"If they price their home accordingly, and it's in good condition, it's usually going to sell."

According to a recent national survey of Coldwell Banker real estate agents, 56 percent said they believe listing prices in their market remain above where they need to be to attract buyers.

In addition, 77 percent said the majority of sellers in their market still have "unrealistic" expectations regarding the initial selling price for their properties.

Thus, Beth Anne Brogan hopes a price reduction will help sell her home on Country Club Drive in Robinson.

With advice from their Coldwell Banker agent, Brogan and husband Darryl agreed to lower their $374,500 asking price by $19,000, or about 5 percent.

"My husband is being transferred to a job in Virginia, and we have to move," Beth Anne Brogan said. "But we put the home on the market in September, and the traffic has been slow. We've only a handful of people," she said. "Now, maybe our luck will change."

The Brogans are among about 700 homeowners participating in a nationwide Coldwell Banker sales promotion that offers homes with prices reduced prices up to 10 percent through Sunday.

Some of the local sellers have agreed to lower prices even more -- from 5 percent to 25 percent -- during that period, said George Hackett, president of Coldwell Banker Real Estate in Pittsburgh.

In May, Howard Hanna Real Estate Services ran a promotion featuring Sunday open houses for about 400 area sellers who lowered their prices by 10 percent or more, and had good results, said Howard "Hoddy" Hanna, CEO of Hanna Holdings Inc.

"In June, right after the sale, our company sold 17 percent of our active single-family houses, but 24 percent of the homes that reduced prices sold," Hanna said. "Then in July, we sold 15 percent of our active listings, including 26 percent that had participated in the campaign."

Home sales in the five-county Pittsburgh region plummeted in August by 25.2 percent compared with the same month last year -- the biggest drop this year -- according to a report last month.

There were 2,516 home sales in August, compared with 3,364 in August 2007. The median sales price declined 4.9 percent, said RealStats, a South Side-based real estate information company. The report covers Allegheny, Beaver, Butler, Washington and Westmoreland counties. August had two fewer selling days this year.

Local real estate officials say home sellers still can get a decent price for their homes in the Pittsburgh region, even when they lower the asking price.

For example, Hanna said figures from West Penn Multi-List Inc., the area's major home listing service, show the average price of homes sold in the region from January through August this year was $151,671, up 0.08 percent from the comparable period in 2007. Those figures cover homes listed by real estate agent members of the Multi-List.

Area companies turn with times in wind energy

Two companies with Pittsburgh roots dating to the 19th century are making southwestern Pennsylvania known worldwide for its windmill component-manufacturing capabilities.

PPG Industries Inc. manufactures industrial coatings for windmill towers and blades, as well as Fiberglas used for manufacturing blades. And Converteam makes windmill-drive systems and automation/controls.

Both companies have long histories in the region.

Converteam traces its lineage to 1886 and Westinghouse Drive Systems. PPG has been a part of Pittsburgh since 1883. Today, they are among the world's elite in supplying parts used to make windmills.

PPG and Converteam have adapted products and production methods used in other industries to meet the demands of the rapidly expanding wind-energy industry.

How large is the wind industry? In Pennsylvania alone, a recent study issued by the United Steelworkers and the Sierra Club, projected that nearly 20,000 wind energy-related jobs could be created instate if the U.S. commits to a 10-year program to stabilize carbon emissions.

World-class wind-industry players -- including Spain's Gamesa and Iberdrola, along with PPG and Converteam -- employ thousands in Pennsylvania.

"We're leveraging our research and development in other industries, like aerospace, to meet the needs in the wind-power industry," said Cheryl A. Richards, a PPG market development manager, during a tour of the company's Coatings Innovations Center in Allison Park.

PPG and Converteam on Tuesday hosted a tour of their wind connections. The tour was sponsored by the Pittsburgh Regional Alliance, in cooperation with the state Department of Community and Economic Development.

PPG's initial work in the wind industry occurred in Europe 20 years ago, supplying Fiberglas for windmill blades. Today, PPG supplies coatings for blades and the towers that anchor the blades and the nacelle -- which holds the windmill's working parts.

Converteam, known as Alsthom Power Systems until 2006, became involved with wind power in the early 1990s.

"We're the largest independent supplier of power-conversion equipment for wind turbines in the world," said James Esneault, senior business development manager for Converteam.

Demand for wind power to help satisfy power needs, while reducing greenhouse-gas emissions from coal-fired power plants, has driven a hiring explosion at Converteam's headquarters in O'Hara.

Employment has doubled since 2007, with 100 new hires added this year to the previous 180. Another 30 engineers will be hired between now and year's end, with 100 more workers expected to be added in 2009.

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BNY Mellon named custodian of Treasury's $700B bailout

The Bank of New York Mellon Corp. emerged as a central player in the federal government's financial rescue plan Tuesday, when it was named sole custodian for up to $700 billion in securities.

In addition, BNY Mellon became one of the first major banks to participate in the Treasury Department's plan to buy up to $250 billion worth of preferred stock in thousands of financial institutions, the agency said. In BNY Mellon's case, the Treasury will purchase $3 billion in preferred stock and warrants.

Both developments are part of the governments' rapidly unfolding actions to spur lending and unfreeze credit markets.

Effective immediately, the government contract means BNY Mellon keeps the records and provides accounting work for the $250 billion in preferred shares purchased by the Treasury plus about $450 billion in securities to be purchased later.

BNY Mellon will manage the auctions of those $450 billion in troubled securities that the Treasury will purchase from financial institutions to bolster their balance sheets and restore their faith in lending to one another. The government will sell the securities later, presumably at a profit.

"It makes you feel better about BNY Mellon's position in the world and the confidence the government has in them to be named as the main servicer," said Andrew Marquardt, senior analyst at Fox-Pitt Kelton, New York.

The dollar value of the contract was not disclosed, but Marquardt believed it would amount to "a modest positive" for BNY Mellon, which is headquartered in New York and has major operations in Pittsburgh, where it employs 6,700. The agreement lasts three years, with a government option to extend it four more, Treasury spokeswoman Jennifer Zuccarelli said.

BNY Mellon is the world's largest investment custodian, administering more than $23 trillion in assets. It outbid 70 institutions for the securities work.

Some of the work for the Treasury might be done in Pittsburgh, but it was premature to say, BNY Mellon spokesman Ron Gruendl said.

Other institutions to sign onto the Treasury's plan to buy their preferred stock included Citigroup, JPMorgan Chase, Bank of America, Wells Fargo, and Goldman Sachs. Banks and savings institutions have until end of day Nov. 14 to sign on.

There are strings attached. Those selling shares to the Treasury must agree to limit compensation for CEOs, chief financial officers and the three next-highest-paid officers. Standards so far include ending pay that encourages strategies that endanger the bank, and forfeiting incentive pay later found based on inaccurate information.

Some of the nation's largest banks had to be pressured to participate by Treasury Secretary Henry Paulson, who wanted healthy ones that didn't need government capital to go first to remove the impression a bank's participation means it needed a bailout.

"There's no stigma attached. This is for the greater good," Marquardt said. "It's part of the restoration of credibility and confidence in the financial system."

None of the biggest banks with Pittsburgh branches said they were signing on to the plan yet.

Spokesmen for PNC Financial Services Group, National City Corp. and Huntington Bancshares said it is too early to comment without seeing all the details. Citizens Financial Group is not eligible to participate, said a spokesman for the bank, a subsidiary of the Royal Bank of Scotland.

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URA postpones decision on Hill District grocery

The Hill District's nearly 30-year wait for a decision on a new grocery store for the neighborhood will take a little longer -- maybe a month more.

The city's Urban Redevelopment Authority likely will wait until at least November to choose between discount grocery chain Save-A-Lot and locally owned full-service Kuhn's markets, which are vying to put a store on Centre Avenue, officials said Tuesday.

Some parties involved in the project, including officials of St. Louis-based Save-A-Lot, had expected the URA board to consider a decision on the competing proposals at this month's meeting Thursday.

However, the issue is not on the agenda, Kyra Straussman, the agency's real estate director, said yesterday.

"We're going to hold it," said Tonya Payne, a URA director and city councilwoman whose constituency includes the Hill District.

She said representatives of community groups Hill House Economic Development Corp. and One Hill Neighborhood Coalition requested the delay to allow time for Kuhn's to alter its proposal, but she did not know how.

"I got so many calls and comments in support of Kuhn's," Payne said. "I want to be sure about Kuhn's proposal before I say anything about it."

Save-A-Lot wants to put a 16,850-square-foot store along Centre Avenue on land controlled by the URA. Prices would be 40 percent less than those in a regular grocery store.

Kuhn's has proposed a 100,000-square-foot store on the same site that would include a pharmacy, bakery, deli, meat counter and a fresh fish section.

The Kuhn's store would be part of a larger development called Centre City Square. The Kuhn's proposal is being made in conjunction with Hill House Economic Development Corp. and developer McCormack Baron Salazar. It envisions other retail space, restaurants and parking.

Officials of Kuhn's and Save-A-Lot could not be reached for comment yesterday.

"I spoke to Save-A-Lot people earlier today, and their plans were to be at the meeting on Thursday," Howard Slaughter, CEO of Landmarks Community Capital Corp., said yesterday. Slaughter has been working with Save-A-Lot in its efforts to bring a store to the Hill.

Either proposal is expected to be aided by $2 million in financial support -- $1 million from the URA and a like amount pledged by the Pittsburgh Penguins -- as part of a Community Benefits Agreement designed to spark development in the Hill in conjunction with construction of a $290 million arena for the hockey team.

The Hill District hasn't had a supermarket since the early 1980s when a Centre Avenue Shop 'n Save closed.

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Nuclear stances differ in degree

The development of nuclear power plants in the United States will chug forward regardless of who becomes the next president, industry experts say.

Republican presidential hopeful John McCain has called for the construction of 45 plants by 2030. Democrat Barack Obama concedes that nuclear power has a role to play in cleaner-burning energy production but has set no construction targets and, unlike McCain, opposes storing the spent waste in Nevada's Yucca Mountain -- a long-discussed but still-unused depository.

"Both candidates are pro-nuclear. It's the degree of promotion of nuclear that defines their differences," said Tyson Slocum, director of the energy program for Public Citizen, a national consumer advocacy agency. "Whereas John McCain is seeking a massive expansion, Obama has been far more vague."

After a 30-year hiatus because of cost overruns, delays and the 1979 meltdown at Three Mile Island near Harrisburg, nuclear power plants again are under consideration by U.S. utilities.

Nuclear power lacks the environmentally damaging emissions of coal, which produces more than half of the nation's electricity. But reactors are costly to build and insure because of health risks posed if radioactive material inside the vessel head would escape. Long-term storage of the toxic waste at the Yucca Mountain site is an unresolved problem.

The Bush administration's energy policy reinvigorated the domestic nuclear industry, offering generous production tax credits, partial reimbursements against regulatory delays and $18.5 billion in loan guarantees.

Although final licensing and construction is years away, about half of the more than two dozen plants proposed would use reactors designed by Monroeville-based Westinghouse Electric Co. The one-time conglomerate exclusively designs, builds and maintains reactors, domestically and abroad.

This boost has meant 3,000 high-skilled Westinghouse jobs worldwide since 2005, hundreds of them locally. So rapid is expansion that the company is building a headquarters in Cranberry, to open next summer, and renting space in the interim to accommodate new employees.

"The nuclear renaissance is here, regardless of who would win the election," said Westinghouse spokesman Vaughn Gilbert. "We have had support from both sides of the aisle. It was during the Clinton administration that the law was changed that had precluded us from doing work in China. Our contracts there were won with strong support from the Bush administration."

Westinghouse last year won Beijing's first major international contract for reactor construction. For $5.3 billion, the company will deliver to China four of its AP1000 reactors -- designed to be safer, simpler and less expensive than previous models. Each reactor can generate electricity to power nearly 1 million homes.

On Wednesday, President Bush signed a landmark law permitting U.S. companies to sell nuclear materials to India for the first time since 1974. That policy breaks with the international Nuclear Nonproliferation Treaty, which banned such sales to the energy-hungry nation because it has tested nuclear weapons that could be used against neighboring Pakistan.

Much of Westinghouse's expansion is fueled by international business. The United Kingdom, South Africa and Canada are other potential customers, but U.S. growth is important, too. This spring the company signed engineering contracts with utilities in Georgia and South Carolina for four reactors, the first such deals since 1979.

Obama: More skeptical

Although Obama expresses more skepticism about nuclear power, he voted for the 2005 Energy Policy Act, which offered billions in subsidies to the nuclear industry -- as well as to corn-based ethanol. Both are important constituencies in his home state of Illinois, the second-biggest corn grower after Iowa, and the headquarters of Exelon Corp., the nation's largest owner of nuclear plants.

Obama introduced legislation in 2006 strengthening reporting requirements for radiation leaks, such as those emitted in late 2005 from Exelon's facilities south of Chicago, but the proposal was weakened and stalled in committee. Exelon executives and employees are among Obama's largest campaign contributors.

Nevertheless, it would take a lot of persuading for Obama to support future nuclear subsidies, said his energy adviser, Jason Grumet.

Although Obama believes subsidies and incentives are critical to overcoming barriers for less-established energy producers, such as ethanol, "once these new technologies have had the chance to succeed, the marketplace and not government should determine the role that they play in the economy," Grumet said. "It is irresponsible and, ultimately, insincere to commit the country to a certain number of facilities regardless of their cost or performance."

The Obama campaign supports storage of nuclear material on-site at existing reactor facilities, as has been done for decades. In the battleground state of Nevada, it has run TV ads chiding McCain for supporting the storage of nuclear waste in Nevada yet opposing its transport through his home state of Arizona.

McCain has dubbed Obama "Dr. No," for supporting new reactors but not Yucca storage.

David Damore, a political scientist at the University of Nevada at Las Vegas, said voters in his state have "Yucca fatigue," and the candidates' positions on the issue should matter little.

"There is a gap between the heated rhetoric you'll hear about, and the impact on behavior," Damore said. "With the economy so ascendant as an issue, energy is not getting the traction that it might in another cycle."

Indeed, the sputtering international credit market -- more than politics -- could hamstring the nuclear renewal. Industry executives are adamant that more federal subsidies are essential.

"A single plant is forecast to cost somewhere in the neighborhood of $6 (billion) to $10 billion. You can see that the $18.5 billion (allocated to the nuclear loan guarantee program) doesn't go too far," said Robert Hornick, a senior director at credit rating firm Fitch. "The loan guarantees are going to be important if this country wants to kick-start its nuclear energy program."

McCain: No handouts

Despite his call for reactors, McCain opposes further subsidies. He voted against the 2005 energy bill, in part because of its rich subsidies for ethanol. The incentives in place for nuclear power are adequate, said campaign spokesman Peter A. Feldman.

"Sen. McCain's plan is not designed to be a handout to the industry," Feldman said. "Of course industry is always going to want more money."

In contrast to Obama, McCain supports nuclear waste reprocessing to help deal with the disposal issue. That's an expensive procedure not practiced in the United States because of concerns that waste could be diverted for use in nuclear weapons.

Despite his more guarded approach, Obama could be better for the nuclear revival, Westinghouse CEO Aris Candris said in an interview with the Tribune-Review earlier this year.

A Democratic administration could neutralize industry critics, he said.

"In general, if a more liberal administration stands up and says, 'We've thought through it, that's the way we're going to go, that's the best choice for the nation,' they will have more credibility with some of the skeptics than somebody that came in already committed to the idea," Candris said.

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Giant Eagle offers fuelperks! for online shopping

Giant Eagle will launch an online mall on Tuesday where shoppers can earn discounts on gasoline as they make purchases at more than 600 retailers.

The program marks the first time O'Hara-based Giant Eagle Inc. has stepped outside its role as a traditional supermarket retailer, spokesman Dick Roberts said this morning.

The Web site will have links to Macy's, Dick's Sporting Goods and other online stores. Shoppers will enter account numbers from their Giant Eagle Advantage cards, do their shopping and collect fuelperks! discounts on gas purchased at the company's GetGo stations.

For every $50 they spend at the fuelperks! Mall, customers will get 10 cents off each gallon of gas they buy at a GetGo location.

Other participating retailers will include Sears, Target, Home Depot, Saks Fifth Avenue, Borders, GameStop, Nike, Old Navy, PetSmart and Office Depot.

Giant Eagle has 158 corporate-owned and 65 independently owned grocery stores, plus 130 GetGo gas stations and convenience stores in Pennsylvania, Ohio and parts of West Virginia and Maryland.

The National Retail Federation, in its 2008 holiday forecast, counts gas prices among the reasons why many consumers prefer to shop on their computers, rather than in stores. Online sales are projected to make up 7 percent of the total $470 billion in retail sales this holiday season, the trade group said.

Citizens Bank parent taken over by British government

Citizens Bank of Pennsylvania's European parent, Royal Bank of Scotland Group, may be taken over by the British government in exchange for $34 billion in much-needed capital.

Citizens has 128 branches in Western Pennsylvania, second behind National City's 158, and holds more than 8 percent of this area's deposits, making it the region's fourth largest bank. It arrived in Pennsylvania in 2001 by acquiring the retail banking business of Mellon Bank.

The bailout plan would give the British government up to 60 percent ownership of Royal Bank of Scotland, known as RBS, in what would be the largest bank nationalization in Europe. The government also replaced RBS chief executive Fred Goodwin.

Based in Edinburgh, Scotland, RBS is the second-largest bank in the U.K. The bank is suffering from the housing slump in Britain and in the United States. RBS had taken huge write-downs related to subprime loans earlier this year and booked its first half-year loss in 40 years.

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