Regional home sales drop 21 percent, median price increases

A streak of slumping home sales in the Pittsburgh region reached 15 months in May, with a 21.5 percent drop continuing a pattern that stretches back to March 2007.

There were 2,426 homes sold during May compared with 3,089 for the same month a year ago, with each of five counties showing a decline, according to a report from RealStats, a real estate information company on the South Side.

The decline was the steepest yet this year, said RealStats, which tracks sales of homes sold for $10,000 and more through deed recordings in Allegheny, Beaver, Butler, Washington and Westmoreland counties. It exceeded drops of 19.1 percent in March and 18.4 percent in January.

Despite the drop in sales, the median price of homes sold in the region rose again -- by 4.7 percent to $122,000 in May. That continued a persistent pattern here. The median price, which is the point at which half the homes sold for more and half for less, declined by 1.8 percent in April, but that was only the second time since 2005 that home values did not appreciate in the region.

"May's numbers show that the current market requires greater patience on the part of sellers, but that patience is paying off in the form of higher prices," said Daniel Murrer, vice president of RealSTATs.

One explanation for what Murrer calls the "paradox" between sales and prices could be the increased difficulty some buyers may be experiencing securing loans to buy homes, said Robert Dye, senior economist with PNC Financial Services Group Inc.

"It could be a shift in the composition of the market," he said.

Subprime loans used by many lower-income buyers have virtually disappeared and low-documentation loans (those requiring no proof of income and other indications of credit worthiness) are have been severely restricted in the wake of the national mortgage and credit crisis.

Thus, people buying homes could be stronger buyers who can afford more expensive properties.

The overall drop in sales took the total value of homes sold in the region to $375.7 million for May, down from sales volume of $453.1 million in May 2007, Murrer said.

Sales totals for Allegheny County declined to 1,525 in May, a drop of 20.1 percent from 1,908 a year ago, RealStats figures show.

Other county totals show Beaver County with 166, down 23.9 percent from 218; Butler County, with 178, down 24.9 percent from 237; Washington, with 203, down 24.8 percent from 270; and Westmoreland County, with 354, down 22.4 percent from 456.

Rates on 30-year mortgages rose this week to the highest level in nearly nine months, Freddie Mac reported Thursday. Rates on 30-year fixed-rate mortgages averaged 6.42, up sharply from 6.32 last week, the mortgage company said.

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Protesters target health insurers across the U.S.

Dozens of protesters, including physicians and social workers, rallied Thursday outside Highmark Inc.'s headquarters, Downtown, to push for nationwide, single-payer health insurance. All wore one blue glove, with a marker-made "X" on top -- a reference to Highmark's "better hand in your health" advertising campaign. The protest was one of 19 across the country, primarily in cities where major insurers are based, and the events coincided with the annual convention of the trade group America's Health Insurance Plans in San Francisco. Jean Budowanec of Medina, Ohio, attended the Pittsburgh event, saying her sister-in-law, despite having health insurance, was denied coverage and billed for $15,000 for more than a week in a hospital.

Zippo cuts 35

Zippo Manufacturing Co. of Bradford laid off 35 employees, citing a recent decline in business. Business though April was only slightly behind the same period last year, but lighter sales since then have decreased, particularly in the U.S., and the sales forecast looks soft, CEO Greg Booth said. Zippo's business has been affected by the anti-smoking movement, Transportation Safety Administration regulations and counterfeits. To help diversify, Zippo wants 50 percent its products to be unrelated to smoking by 2010. The layoff was effective June 11.

Advocate sought

Several consumer groups and a labor union that represents health-care workers want the state to appoint an independent consumer advocate to participate in a review of the proposed merger of the state's two largest health insurers. The groups say such an advocate would ensure that consumers' interests are represented during the state Insurance Department review of the possible marriage of Independence Blue Cross and Highmark. Gov. Ed Rendell says he doesn't think an independent advocate is necessary because he and Acting Insurance Commissioner Joel Ario already represent insurance ratepayers.

eBay battles fraud

eBay Inc. hopes to attract more online traders by expanding the protections available to people who use its PayPal payment service for transactions on eBay's Internet marketplaces. EBay executives said Thursday at the company's annual user conference that buyers who pay for items with PayPal will be eligible for full refunds, with no cap, if a seller fails to deliver an item as promised. Previously a buyer's coverage was capped at $200, or $2,000 if the item's seller enjoyed a particularly good reputation on eBay. EBay sellers who accept PayPal as a payment method will also get unlimited protection against a charge being reversed.

5.2 million still haven't filed

About 5.2 million retirees and disabled veterans nationwide -- including 15,105 in Pittsburgh -- haven't filed a tax return to claim their economic stimulus payments, the Internal Revenue Service said Thursday, announcing a campaign to get out the word to those population segments. The IRS has issued $63.8 billion so far in 76.5 million payments, based on 2007 tax returns processed. Individuals can receive $600; married couples, $1,200. About 26 percent of retirees and disabled veterans have not filed to claim their payments, the IRS said. The figures also include 1,458 potential recipients in McKeesport. Many retirees and veterans don't file tax returns because their benefits aren't taxable, but they must file this year to get a payment.

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Kennametal workers ratify 3-year deal

Workers at Kennametal Corp.'s Chestnut Ridge and Kingston plants approve a three-year contract Thursday that outlines the closing of Chestnut Ridge plant and the layoffs of workers from both Derry locations.

The contract approved by United Auto Workers Local 1059, which represents 77 production workers at the Chestnut Ridge plant and about 35 workers at the Kingston plant, grants severance pay and benefits to workers who will lose their jobs. The workers at the Chestnut Ridge plant have more seniority and can displace those working at the Kingston plant, Kevin Honse, president of UAW Local 1059, said following the vote yesterday at a Derry social hall.

"The decision is in alignment with our growth strategies and deals directly with Kennametal's need to address product line profitability and product capacity. (It) will generate $3.8 million in annual savings," spokeswoman Christina Reitano said.

Kennametal will begin eliminating jobs at Chestnut Ridge in August and continue through Dec. 15. The plant, which makes products for the drilling industry, could remain open until next spring, depending upon how workers move to new jobs, Honse said.

The union and Kennametal have been negotiating for several weeks, but the UAW could not give Kennametal enough concessions to save the Chestnut Ridge plant, Honse said. He believed Kennametal decided the plant's fate before it started bargaining.

"There was no way you could save $3.8 million a year. You'd have to go down to $5 an hour (in wages)," Honse said.

Under the new contract, workers will get annual pay raises of about 3 percent. They earn an average of about $21 an hour.

In addition to workers transferring to the Kingston plant, which makes carbide powder, the contract allows for 10 workers to transfer to Kennametal's Carbidie plant in Irwin, where workers are represented by the United Steelworkers, Honse said.

Several Kennametal workers expressed bitterness about losing their job when the company is doing well financially.

"I was hoping to work four more years and retire. ... Who's going to hire a 58-year-old man?", said Ralph Gaebel of Jeannette, who is scheduled to lose his job in October.

"They're offering us a $500 signing bonus (for approving the contract) for a job we don't have," said Anita Long of Greensburg, who worked at the plant for 10 1/2 years. "They're shipping our jobs to China," where the workers will be paid $2 an hour, she said.

Kennametal will transfer nearly twice as many jobs to its U.S. facilities than to its plant in Tianjin, China, Reitano said. The majority of the jobs will remain in Pennsylvania. Work done at the Chestnut Ridge plant will be transferred to plants in Rogers, Ark., and Victoria, British Columbia, she added.

Kennametal will provide outplacement services for affected employees, the company said.

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Mine safety chief to tout progress

WASHINGTON -- Two years after Congress passed historic mine-safety legislation, many of the nation's mines still have no way to provide air to trapped miners, and, despite the law's mandate, can't provide two-way wireless communications underground because that technology doesn't exist, according to the Government Accountability Office, Congress' investigative arm.

Those issues and the ongoing debate over stricter mine-safety regulations will be the focus of a Senate subcommittee hearing today. Richard Stickler, the acting head of the Mine Safety and Health Administration, is slated to testify about the agency's progress in meeting the mandates set forth in the 2006 MINER Act, a law designed to make mining safer.

"In the last 18 months, MSHA has worked at an unprecedented pace to implement the MINER Act," said Matthew Faraci, a mine-safety agency spokesman.

The agency has put several safety rules in place and has additional regulations pending, Faraci said. Proposed guidelines released this week include significantly reducing the hazard of conveyor-belt fires in underground coal mines and creating better refuges for miners who become trapped underground during emergencies.

Requirements for stronger seals in mines to help prevent explosions were approved earlier this year. The MINER Act allows the mine-safety agency to provide an alternative to two-way wireless communications underground if that technology isn't in place by next year, Faraci said.

The agency's efforts have received mixed reviews.

"I don't see why the agency would brag on what they were mandated to do under the law," said Tony Oppegard, a Lexington, Ky., lawyer and former mine-safety regulator. "The proposed rule on mine seals was proposed before the deadline. That was something that had to be done, and I give them credit for doing that. Unfortunately, Mr. Stickler takes his orders from the White House, and the White House is more concerned with coal operators producing coal than coal miners working in the mines."

Critics, including Democrats in the House of Representatives, led by George Miller of California, say the Bush administration has failed "to work aggressively to keep miners safe on the job." Democrats said the Bush administration had done little to push for changes and had filled top-level positions at the Mine Safety and Health Administration with former mining-company executives, including Stickler.

The mining industry has faced increased scrutiny since several high-profile deaths.

Last summer, a collapse at Crandall Canyon in Utah killed nine miners. In 2006, an underground explosion at the Darby Mine in Harlan County, Ky., killed five people, and an explosion at the Sago Mine in West Virginia killed 12 miners.

Stickler said the agency had tried to improve safety in mines by increasing the number of inspectors to more than 700 and had issued more than 50 fines for mines that were found to have violated rules. However, the agency has faced pushback from more than 200 mine operators, who are contesting fines.

"They're trying to game the system," Faraci said.

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Mine compliance costs to exceed estimate

Regulations passed two years ago to improve mine safety and emergency response in case of disaster will cost coal companies millions of dollars, spokesmen said Wednesday.

"There are many challenges to complying with the new law," James Pablic, safety director of Amfire Mining Co. of Latrobe, said Wednesday at a Miners Town Hall meeting that focused on escaping and surviving an emergency.

For Consol Energy Inc., the nation's largest underground mining company, the cost of complying is between $35 million and $45 million for 2006 through 2009, according to a securities filing.

A panel of 10 mine safety experts at the meeting at the Four Points Sheraton near Greensburg emphasized the importance of emergency training and implementing an emergency response plan to increase the likelihood of surviving a mine disaster.

The industry has been adjusting to the regulations in the Mine Improvement and New Emergency Response Act of 2006, known as the MINER Act. It was passed in the wake of the deaths of 12 miners trapped inside the Sago Mine in West Virginina and five who died in an explosion in the Darby No. 1 mine in Kentucky.

The measure requires safety shelters in mines that provide for 96 hours of oxygen, additional breathing apparatus stored underground and two trained mine rescue teams within an hour of a coal mine. Wireless communications with miners are to be instituted by June 2009.

The Mine Safety and Health Administration had estimated that the new emergency evacuation and the requirements for additional breathing apparatus might cost coal companies about $19 million.

To meet the safety requirements, Amfire has bought nine shelters at $90,000 each for the five mines it operates, three of which are in Indiana County. Plus, it has bought thousands of additional self-contained self-rescuers, Pablic said.

Instead of training miners just once a year on using the breathing apparatus, they now must be trained quarterly, Pablic said. "I think it (new safety regulations) make it safer for a lot of people," he said.

At Consol, the costs of fulfilling the safety requirements include the insertion of safety shelters in the mines, as well as the addition of the self-contained self-rescuers, spokesman Thomas Hoffman said.

The requirement that the underground mines have caches of extra 60-minute breathing appratus within a 30-minute walk of miners will mean more costs for Consol, which has 8,000 employees operating 17 mines in six states, Hoffman said. Upper St. Clair-based Consol produces about 70 million tons of coal a year.

Tracking miners in the case of an emergency should improve with the insertion of two phone lines in a mine, as well as safe lines to help miners walk out of the mine. The technology for wireless communications underground is not yet developed, said David Chirdon, the Mine Safety and Health Administration's electrical safety division chief.

One former United Mine Workers safety official believes the new law has improved mine safety, but does not go far enough.

"We need to get into the 21st century in mine safety," said Joseph Main, retired safety and health director for the UMW.

Main, who served as a UMW safety official for 22 years, said procedures should be in place, possibly by using pipes, to test the quality of the underground air, to determine when and where it is safe to send a rescue team. As good a safe haven as the shelters can be, the miners' first thought in case of an emergency should be "to get out," said Main, a former miner.

"The technology prior to the Sago Mine and the Aracoma Mine (West Virginia) accidents was basically 1960s technology. It was very antiquated," Chirdon said. A mine fire in the Aracoma Alma Mine in January 2006 killed two miners, about two weeks after the Sago Mine accident.

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Esmark, USW to arbitrate over sale

The United Steelworkers is heading into arbitration with Esmark Inc. to try to resolve a dispute over the sale of the company and its subsidiary, Wheeling-Pittsburgh Steel. A decision is expected by Saturday. Grievances have been filed by Esmark and the union over the proposed sale to India's Essar Steel Holdings. The union claims Esmark agreed to a buyout without giving it time to put together a competing bid. The USW has joined forces with Russia's OAO Severstal, which is competing for the company. Esmark filed a grievance against the union, accusing it of improperly interfering with a business transaction.

Verizon speeds up FiOS

Verizon Communications Inc. is boosting the speed of its FiOS fiber-optic Internet service in 10 states. The FiOS service areas of Pennsylvania as well as California, Delaware, Indiana, Maryland, Oregon, South Carolina, Texas, Virginia and Washington will see new plans that nearly double Internet speeds, Chief Operating Officer Denny Strigl said. Download speeds will be up to 50 megabits per second starting next week; customers' costs will remain the same. With the upgrade, Verizon will provide the same speeds in all 16 states where FiOS is available. Cable companies, meanwhile, plan a big boost to their own Internet services.

PNC overtime suit

U.S. District Judge David S. Cercone on Wednesday approved a deal in a civil lawsuit in which PNC Financial Services Group agreed to pay a maximum of $438,848 to settle a class-action lawsuit claiming it wrongly denied overtime pay to its financial advisers. The case was filed in February 2007 by two former employees who claimed they were denied overtime pay. The 712 class members each will receive either $900.36 or $450.36, depending on how many submit valid claims. Also to be deducted from the total settlement amount is $10,000 each for the two plaintiffs, $153,597 in legal fees and $27,590 to a third-party claims administrator.

Help for displaced workers

The U.S. Department of Labor approved a grant of up to $12.4 million to help about 5,000 Pennsylvania workers who have lost their jobs through permanent closures or layoffs. Many of the workers targeted for the aid have been certified as eligible for Trade Adjustment Assistance, but the grant will be used by the PA Career Link program to help workers with services not covered under that program, said state Labor and Industry spokesman Christopher Manlove. The federal government will release $5.6 million of the grant initially.

Regus opens 3rd local center

The Dallas-based Regus Group, which already has two business center operations in the Pittsburgh region, has acquired a third at Penn Center East office/retail complex in Wilkins. "Regus, which operates these types of centers nationally, acquired the center for a nominal cost because it signed a long-term lease for the entire fourth floor in Building One," said Barry Layton, general manager of Penn Center East for its owner, LG Realty Advisors, based Downtown. No price was announced. Other Regus-operated centers are in One Oxford Centre, Downtown, and in Foster Plaza, Green Tree.

Asian dining chain growing

Teriyaki Experience, a quick serve dining chain that grew in Canada and other countries before coming to the United States last year, said Wednesday it wants to build about 20 restaurants in the Pittsburgh area. The company is looking for a developer who would find franchisees to run the Asian-themed restaurants, which cook meat and vegetables in water on a griddle as the customer watches. Tony Joseph is director of operations and a McKeesport native. Five Teriyaki Experience restaurants operate so far in the United States.

Zipcar goes to South Side

Zipcar, the car-sharing company with roughly 1,200 members and 37 vehicles in the Pittsburgh area, will expand its service to the city's South Side and add three more vehicles to its local fleet. The South Side service will begin during the week of June 23, said Denna Cox, Zipcar's general manager in Pittsburgh. Vehicles will be stationed at Sidney and 27th streets, Carson and 24th streets, Sidney and 21st streets and at 14th and Muriel streets. Members reserve cars on line for an hour or longer. Costs range from $7 to $11 per hour, and from $60 to $77 a day.

Other business news

• Specialty teen retailer rue21 of Marshall hired former American Eagle Outfitters Inc. executive Mark Chrystal as senior vice president of merchandise planning and allocation. At AE, Chrystal was vice president in the same areas for the aerie brand, and vice president of allocation for the American Eagle brand. Before that, he held positions with Disney Stores and Victoria's Secret. This year, rue21 plans to open 100 stores; the company currently has 382 stores in 41 states, including about a dozen locations in Western Pennsylvania.

• Duquesne Light Co. this week started its annual inspection by helicopter of its nearly 620 miles of transmission lines in Allegheny and Beaver counties, the Downtown-based utility said Wednesday. The inspections, to look for areas where repairs or vegetation management are needed, run daily from 7:30 a.m. to about 6 p.m. The work should be done next week.

• David Holmberg has been named president and CEO of Highmark Inc. company HVHC Inc., the for-profit firm that holds the stock of Highmark's vision care units. Holmberg also will retain the jobs of president and CEO of Eye Care Centers of America, of San Antonio, Texas.

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Briefs: Average gas price in Western Pennsylvania tops $4

Briefs: Average gas price in Western Pennsylvania tops $4

The once-unthinkable has happened: The average gasoline price across Western Pennsylvania this week went past the $4 a gallon hurdle, AAA East Central said Tuesday. The average price for a gallon of regular gasoline from a self-service pump rose 2.3 cents a gallon, to $4.021, up from $3.998 a gallon one week ago. One year ago, the same gallon of gas averaged $2.959. The lowest price in Western Pennsylvania for unleaded regular from a self-serve pump this week was found in Warren in Warren County, for $3.98 a gallon, while the most expensive gallon was selling in Bradford in McKean County for $4.08.

Latrobe Steel talks set

Latrobe Specialty Steel Co. and its union will return to the bargaining table today in the first negotiating session since June 10, said Lisa Pierce, spokeswoman for the steel company. United Steelworkers Local 1537, which represents about 340 workers at the plant, has been off the job since May 1. The union presented the company with a counterproposal earlier this month, and the company said it was reviewing the proposal. Workers went on strike after rejecting a new contract offer April 30. The USW has contended its workers have been locked out since May 9, when the union agreed to return to the job and the company rejected the deal. Kevin Caruso, president of USW Local 1537, could not be reached for comment.

Esmark 'pill' draws ire

Russian steelmaker OAO Severstal says it's disappointed in Esmark Inc.'s tactic to stave off a $670 million takeover bid, saying the move tips the scales to an India-based steel producer. The metals and mining company's offer to purchase Esmark is backed by the United Steelworkers union, but the Wheeling-based company is interested in Essar Steel Holdings Ltd.'s $750 million offer. Severstal's comments follow last week's decision by Esmark's board to adopt a stockholders rights agreement. The so-called "poison pill" agreement would allow Esmark to issue more stock if a stockholder acquires 15 percent or more of Esmark's common stock. The agreement does not apply to offers submitted by the union as part of its collective bargaining agreement with Esmark.

Firefox updates browser

The new version of the Firefox Web browser became available as a free download Tuesday. The release was delayed nearly two hours as visitors checking for the update overloaded Firefox's Web servers, which were slow or unreachable at times. Firefox supporters organized launch parties around the world as they tried to set a world record for most software downloads in a 24-hour period. The category is new, and Guinness World Records must certify it, a process that could take a week or longer.

EEOC sues Leetsdale firm

The U.S. Equal Employment Opportunity Commission filed a federal lawsuit against Hussey Copper Ltd. in Leetsdale for allegedly refusing to hire a man because he participated in a drug rehabilitation program. The commission said in the lawsuit filed in Pittsburgh that Hussey offered to hire Donald Teaford as a production worker in July 2007, contingent upon his passing a physical exam and background check. Hussey refused to hire Teaford after it learned he was taking methadone, the suit said. Hussey's refusal to hire Teaford because of his record of a disability due to drug addiction violates the Americans With Disabilities Act. The lawsuit seeks back pay and compensatory damages. Hussey human resources director James Clayton could not be reached for comment.

Maxim merger approved

Maxim Crane Works Holdings, Inc. said its stockholders approved an agreement for the company to be acquired by Platinum Equity Capital Partners II LP of Beverly Hills, Calif. Platinum Equity, which specializes in mergers and acquisitions and operation of other companies, will pay $42.50 in cash for all the outstanding stock of Collier-based Maxim, said to be the nation's leading coast-to-coast, full-service crane rental company. The merger is expected to be completed on or before June 30, the company said.

PR group to meet in city

About 300 public relations professionals and media from across the country are expected to attend the Public Relations Society of America's Travel & Tourism national conference being held today through Friday at the Westin Convention Center Hotel, Downtown. VisitPittsburgh, the region's convention and visitor's bureau, is hosting the three-day event, which is presented in partnership with the Society of American Travel Writers Associates Council.

Earnings

• Goldman Sachs Group Inc., the world's largest investment bank, on Tuesday said second-quarter earnings fell about 10 percent but still easily beat lower Wall Street expectations on higher fees from asset management and stock underwriting. The company reported a profit of $2.05 billion, or $4.58 per share, for the three months ended May 30 compared to $2.29 billion, or $4.93 per share a year earlier. Revenue fell 7 percent to $9.42 billion from $10.18 billion a year earlier.

Other business news

• GE Transportation won a $96 million contract to upgrade the signaling and communications equipment of a public transit system in Rotterdam, the Netherlands. The Erie-based subsidiary of General Electric Co. said Tuesday the Rotterdam Metro contract is GE's largest-ever rail signaling project and its first full-scale European metro project.

• Westmoreland Community Federal Credit Union plans to break ground on a new branch in Harrison City in Westmoreland County, on June 25. The credit union has two branches, both in Greensburg.

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