Springfield Ilinois Q2 Housing Market Forecast
February 25th, 2007The Ides of March are upon us. Following a significant slowdown in the fourth quarter in 2006, the Springfield Illinois housing market is rebounding in 2007. What type of year the local market will have is usually determined by second quarter activity, April through June. There have been more home sales the second quarter of the year locally the past six years than any other quarter.
It is too early to tell if the first quarter of 2007 will exceed 2006. Closed home sales through February 23 are up slightly by 16, however the homes sold pending are down by 51. The decrease in sales is primarily weather induced, which will likely prevent another record first quarter in sales.
My eye is on how the market will perform this Spring. The second quarter of 2006 is the last time a quarter exceeded the previous years sales, with third & fourth quarter 2006 slipping, and most likely the first quarter of 2007. The market is due for an upswing in sales. The home listings going under contract now through March, will close in April and beyond.
Here are the current trends, the number of homes for sale today in The Capital Area Association of Realtors (CAAR) MLS stands at 1565. The average number of new listings during the next three months is 1638 over the past five years. Last year a whopping 1940 new listings entered the market in the Spring. Using the five year average (1638), by adding that to the current number of homes for sale (1565), that means there will be over 3200 sellers vying for buyers.
The average number of closed home sales in CAAR’s MLS during the second quarter is 1171 the past five years. Last year 1276 home sales closed in the second quarter. Simple math shows that about one in three home sellers listed for sale the next three months will sell and close. This during the height of the home selling season.
My forecast is that home sales will surpass Q2 of 2006. It seems there is some pent up demand resulting from the weather, interest rates are great, unemployment is low, and there is tons of mortgage money available. This will be a very good Spring for local home sellers, unfortunately not for most home sellers. There would have to be all time record numbers of home buyers entering the market to approach even half the home listings selling.
It would be prudent for home sellers to take every possible action they can to make their home more appealing to buyers than their competitor’s homes. As stated in a previous blog, there are three reasons why you will sell; price, condition, and marketing. There are three reasons why you won’t sell; price, condition, and marketing. Let me add, hiring the wrong agent, company, or making decisions based upon advice from the wrong people.
What is meant by the wrong agent? Fewer than forty percent of today’s agents were in business the last time market conditions were like today. You could become the OJT project for the newer agent. What do I mean by the wrong company? Most consumers believe that companies as well as agents are interchangeable, they all do the same things, and produce the same results. Wrong on both counts. The leading broker in the Springfield Illinois market (RE/MAX Professionals) out produced the next four companies combined in 2006. Including RE/MAX, the top five companies combined for more than half of all sales. The remaining 73 companies accounted for less than half the sales. There is a significant difference between agents and companies. Many consumers learn the hard way.
What is meant by making decisions based upon advice from the wrong people? Well intentioned family, friends, and coworkers, regardless of their experience, are not professionals. The advice they impart comes from a particular experience within the framework of an individual sale, different circumstances, and when market conditions were different. Many sales have not taken place, fallen through, and became unduly stressful because poor decisions were made based upon well meaning advice from nonprofessionals.
Selling a home is a business decision. Visit SpringfieldHome.com for market activity by price, questions to ask agents when interviewing, recommended service providers, weekly observations, and broker production charts. You can also register for the next home seller seminar to be held March 22 at The Crowne Plaza Hotel in Springfield. You can learn how to set your home apart from the competition, how to obtain the best price for your home in a buyer’s market, and dozens of Fritz’s nuggets gleaned from twenty years of home sales.
Your success will be determined by your choice of how to sell, whom you trust for advice, which agent, and company you hire.
The upcoming prime time Spring market will be great for large numbers of people, but not everyone. Just as 2006 had 4153 successful home sellers, there were 3189 that had listings leave the market without a sale, and 1521 remained unsold and on the market for sale to begin 2007. The challenge for folks that want to sell their home this year continues to be record numbers of homes for sale. In a perfect world they would all sell. The world is not perfect.
