Fritz Pfister

The Springfield housing market continues to outperform the nation and state. February marked the third consecutive monthly decline for existing home sales in the nation. Springfield marked the ninth consecutive increase in month over month annual gain. March will be the tenth, April the 11th.

Heading into the final week of March closed home sales are up 10.39% over last year. Home listings under contract are up which means April is looking toward being an excellent closing month.

Two areas of concern; home prices, and the inventory. Due to demand resulting from the first time home buyer tax credit, the majority of the sales have been in lower price ranges, which has dragged down the median sale price in March by 12.67%. Year to date, the median sale price is down fractionally by .5% to $99,950.

The thundering herd is awake; there has been a stampede of new listings coming to market. With tax credits expiring April 30th, many are taking action now. The number of new listings is up 44.5% in March, and for the year are up 15.19%. There are 1597 homes listed for sale today.

The year began with the inventory down nearly 20% from 2009 providing hope for home sellers. That gap has narrowed to only down 5% from last year. Good news for home buyers that have had a tough time finding the right home. Not so good for home sellers, the competition continues to grow.

The news on new home construction couldn’t get any worse. In the nation new home sales fell to a seasonally adjusted 308,000, the lowest in 63 years of record keeping. Some say bad weather played a role in February. Maybe to a degree, but this barely leaves new construction with a pulse. Foreclosures once again threaten markets, and prices due to high unemployment. Springfield only had 12 residential permits issued in the first two months of 2010.

The unemployment rate for construction workers stands at 27.6%. The stimulus that was to be used for shovel ready projects is an abysmal failure. As reported by an AP study, stimulus spending has had no impact on unemployment in a county by county comparison, verified by economists from five universities.

In my December 26 forecast for 2010 I predicted that stimulus money being released in time for elections, and the Illinois capital plan would keep unemployment in Springfield below 10%. I was wrong ; Springfield hit 10% in January. Question? Why does it take less than a week for the Feds to report the previous month’s unemployment figures, the state a month, and the city of Springfield two months?

The bottom line is the market is unfolding just as predicted. Now through April 30 may be the best it will be in 2010 to sell your home. A glance at the headlines of The Wall Street Journal on Friday sent a chill up my spine; Debt Fears Send Rates Up.

Seems the passage of the health care plan didn’t have many investor’s buying the Obama line the new law will lower deficits. The opposite is true with many fearing the new health care law sending deficits into orbit. The ten year treasury note rose to 3.899%, the highest since last June bumping thirty year mortgages above 5%.

The reality began this week for corporate America as to the costs of Obamacare; AT&T $1 billion, Deere & Co. $150 million, Caterpillar $100 to $125 million, to name a few. Davis Zion analyst for Credit Suisse says S&P 500 companies will take a $4.5 billion write off in profits the first quarter of this year as the taxes in Obmamacare are implemented.

Yesterday the Obama administration announced a new $58 billion bailout for distressed homeowners facing foreclosure as a result of losing their jobs. Isn’t America great? The government implements policies like Obamacare, higher taxes, and heavy regulations depressing job creation, that causes unemployment to skyrocket, then use those left with a job to tax to help people who have lost their job to keep their homes!

This after the first $75 billion foreclosure plan failed. Of 1.1 million applicants the first year only 171,000 received relief through the program. Why? Bureaucracy, and paperwork were to blame. Makes you feel good about the prospects for health care services doesn’t it?

Only $53 million of $75 billion was spent the first year of the foreclosure reduction program. Add the new $58 billion to the balance, and 3 to 4 million families may get relief, of the 14 to 15 million under water homeowners in jeopardy of foreclosure. If the Katrina type response of the first effort can be overcome.

Oh, never mind, times are good in Springfield, at least for now. We can deal with all the adverse economic results of higher taxation, nationalizing health care, massive deficits, the potential downgrading of America’s credit as they begin to hit. Cap and trade and card check are the next progressive moves that will drive job creation further from reality.

Now through April 30th will be opportunity time for home sellers due to demand tax credits will generate. Who’ll be left after that? Now is opportunity time for buyers due to the tax credits, and higher interest rates as the year unfolds.

It is going to be very interesting to watch this historically stable Midwestern real estate market. How will this typically insulated housing market be impacted by the government?  How will new laws, policies, rules, regulations, tax increases and edicts play out in Springfield Illinois? Stay tuned we’re about to find out.

The opinions expressed here are solely those of Fritz Pfister, or identified sources,  and not those of RE/MAX Professionals Springfield, or RE/MAX International.

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Today’s vote by the house will seal the fate of Obamacare. If they have a vote. Odds are if they vote it will pass, Pelosi won’t risk failure until passage is guaranteed.
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Last week we advised home buyers and home sellers to put their track shoes on for the dash to the April 30th deadline for tax credits. That mortgage interest rates would start going up probably in the next month or so. Now is the time to act if you want to buy or sell a [...]

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On December 26 I made my predictions for the housing market for 2010 in my weekly observations. I predicted the year would start slowly, and activity would increase as we approached the tax credit deadline on April 30th requiring buyers to have a contract to purchase in force. That the first half of the year would [...]