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VOL. 122 | NO. 187 | Wednesday, October 3, 2007

Daily Digest

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Nucor Continues Work On New Complex

     Nucor Corp. has applied for a permit for a $1.1 million building in its new 600-acre complex on President's Island. Blytheville, Ark.-based Stracener Brothers Construction Corp. is the contractor.
     The building, at 3599 Paul Lowry Road, will be about 14,600 square feet, said Thad Solomon, general manager of Nucor's Memphis plant, and will house locker rooms for employees, a training room and the company's health and safety department. Space also is being left for the addition of a cafeteria in the future.
     The building is slated for completion some time in 2008, Solomon said, adding he hopes the company can occupy the building "not long after the first of the year."
     The building is part of Nucor's planned steel mill in Frank C. Pidgeon Industrial Park. The plant will operate as a Special Bar Quality Products mill.
     The architect for the project is Nucor Building Systems, the company's in-house design department.
     "It is a subsidiary of Nucor," Solomon said. "We have four locations around the country that design [buildings] and they fabricate the steel for these buildings."
     This particular project is being designed by the Nucor Building Systems in Terrell, Texas. The other locations are in Swansea, S.C., and Waterloo, Ind., as well as a new location under construction in Brigham City, Utah.

Mixed-Use Developments On Tap at Design Review

     Proposed renovations for Downtown buildings at 91 S. Front St. and 59 S. Main St. top the agenda at today's Center City Commission (CCC) Design Review Board meeting.
     The two-story building at 91 S. Front St. is slated to be developed into a mixed residential and commercial use building. The 59 S. Main St. project is slated to be developed into a three-story building offering mixed residential and commercial use.
     The meeting begins today at 5 p.m. in the CCC conference room, 114 N. Main St.
     Call 575-0540 for more information.

Residential Sales Continue Skid in September

     In what has become a common theme this year, residential home sales continued their downward trend, falling 28.1 percent from September 2006 to September 2007, according to the latest data from real estate information company Chandler Reports, www.chandlerreports.com.
     Just 1,589 home sales were recorded during the month, a decline from the 2,210 sold in September of last year. September also saw a 23.6 percent drop from the 2,079 sales in August.
     Also, home prices, which have been trending slightly upward of late, took a hit. The average price for homes sold during September was $143,517, marking a 4 percent drop from the September 2006 price of $149,316 and a 11.2 percent drop from the August price of $159,583.
     The year-to-date sales of 16,592 are down 15.3 percent from the record 19,588 sales recorded through September 2006.
     As for condominiums, they suffered an equally if not more disastrous slide in September, which saw just 78 sales registered. That's down 35 percent from September 2006 when there were 120 sales and 29.7 percent from August when there were 111. Condo prices averaged $150,509 during September, a 1.1 percent increase from September 2006 when the average price was $148,846. It was a 6 percent increase from August 2007 when sales averaged $141,436.
     Year-to-date condo sales have totaled 862, a 26.5 percent slide from the same period in 2006 when sales totaled 1,173.

Northwest Sets Monthly Performance Record

     Northwest Airlines set a new monthly performance record during September, completing 12 consecutive days in the month without a cancellation.
     Northwest completed 99.7 percent of all mainline passenger flights for the month.
     Northwest was forced to cancel numerous flights over the summer because of a shortage of pilots.
     The Eagan, Minn.-based airline operates a hub at Memphis International Airport.

Near-Term Home Sales Index Sees August Decline

     An index that forecasts near-term home sales fell in August to a record low as would-be homebuyers had difficulty getting mortgages. Economists said the housing market's woes show no sign of improving soon.
     The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago.
     The pending home sales index has done a fairly good job of predicting sales levels over the following two months, said Joshua Shapiro, chief U.S. economist with MFR Inc. in New York.
     Shapiro and other analysts expect prices to fall further before home sales rebound. Developers already are making big price cuts to move unsold new homes, but existing homeowners are more reluctant to do so.
     "We haven't reached bottom yet," Shapiro said.
     August's reading of 85.5 was below analysts' expectations and the lowest ever for the index, which started in January 2001. An index reading of 100 is equal to the average level of sales activity in 2001.
     With defaults rising among borrowers with weak credit, lenders in August backed off from all but the safest mortgages.
     The problems, experts say, were seen especially in expensive areas where borrowers need to take out "jumbo" home loans above $417,000 that can't be sold to government-sponsored mortgage companies Fannie Mae and Freddie Mac
     In late August, the gap in mortgage rates between jumbo loans and "conforming" loans below the $417,000 limit widened to 0.93 percentage points, up from a typical level of 0.2 percentage points, according to financial publisher HSH Associates.
     That difference makes it harder for prospective buyers - particularly in the pricey Northeast and West Coast markets - to afford more expensive homes.
     "This is probably the most challenging credit market environment that's faced the housing market in 10 years," said Keith Gumbinger, vice president of HSH.
     As of last week, the gap had narrowed to a difference of 0.76 percentage points, with 30-year fixed rate jumbo home loans nationwide averaging 7.22 percent and conforming loans averaging 6.46 percent, according to HSH's weekly survey.
     While that's an improvement, Gumbinger said, it could take months for the situation to improve.
     In some areas, up to 30 percent of signed contracts fell through in August, said Lawrence Yun, senior economist at the real estate trade group.
     "Some creditworthy people are trying to buy homes but can't," Yun said in a prepared statement.
     The Realtors' index is based on a sample representing about 20 percent of existing home sales nationwide.

Alexander, Corker Approve Defense Authorization Bill

     Both of Tennessee's U.S. senators - Republicans Lamar Alexander and Bob Corker - voted to approve the Defense Authorization Bill this week, which passed the Senate by a vote of 92 to 3.
     In a statement, Corker's office said provisions of the bill include a 3.5 percent across-the-board pay increase for military personnel, funding for medical care for soldiers and $4 billion for Mine Resistant Ambush Protected Vehicles (MRAPs), which protect soldiers against improvised explosive devices.

Advo Inc.'s Atkinson Named Prez of AdFed

     James Atkinson of Advo Inc. has been named the president of the Memphis Advertising Federation board of directors.
     Maury Tower of WREG-TV is first-vice president, Susan Ewing of inferno is second-vice president and Marcia Anthony of Clear Channel Television is third-vice president.
     Newly elected board members are Preston Davis of The Commercial Appeal, Jenny Dow of West Rogers, Pam Routh of J.W. Moore Printing and Kimmie Vaulx with Baptist Memorial Health Care.

Nashville Group Agrees to Buy Former Memphis Chicks Club

     A Nashville investment group has agreed to buy the Double-A West Tenn Diamond Jaxx, and the lead partner said they will keep the team in Jackson, Tenn., for at least one more season.
     Reese Smith III, a minority partner in the Triple-A Nashville Sounds, said Monday they hope to close the deal within 90 days. The Diamond Jaxx, which is the Chicago Cubs' Double-A affiliate, confirmed the sale agreement in a statement.
     "We're all Middle Tennessee people," Smith said. "Nobody is out of state. This is a group that's local, 200 miles up the road."
     The team moved from Memphis prior to the 1998 season when it was known as the Memphis Chicks.
     Bob Lozinak has been trying to sell or relocate the Diamond Jaxx for two years, complaining Jackson doesn't have enough fans to keep the team. He tried to relocate in 2005 but was denied permission by Minor League Baseball.
     He had a deal after the 2006 season to sell to Florida investors, an agreement that didn't meet deadlines for approval by Minor League Baseball, the Southern League and Major League Baseball.
     The Diamond Jaxx drew 113,351 fans in 2006, worst in the Southern League. Attendance increased by 17,865 this season, but team officials say 200,000 is needed to break even.
PROPERTY SALES 71 233 2,852
MORTGAGES 74 171 1,954
BUILDING PERMITS 125 894 6,595
BANKRUPTCIES 34 206 1,183