The Spring Housing Market 2010 Springfield Illinois
March 7th, 2010Spring is to Realtors what Christmas is to children. At least in this Midwest housing market. During normal economic times the spring market is usually the busiest time of the year for agents. These are anything but normal economic times.
Fresh off the heals of a record tying 945 home sales in the fourth quarter of 2009, the first quarter of 2010 feels sluggish. Probably because it is. With a backdrop of tax incentives and record low interest rates home sales the first two months have exceeded the first two months of 2009 by a whopping 25 sales.
If you need a reminder things weren’t real peachy in the economy to start 2009. You could say consumers were nervous. Asking most consumers to spend money was like asking a claustrophobic to become a spelunker. As a result the 648 home sales were the fewest since 2001. Through the first two months of 2010 we’re up to the second fewest home sales since 2001. Special.
The height of the market in Springfield was during the years 2003 through 2007. In order to measure what kind of progress the market is making it would be better to compare the five year average during the good times to where we stand today.
Believe me I am happy home sales are up over last year, because that sure beats the alternative, however the realist in me wants to know more. January came in 16% below the five year average, and February 12.7% below. Sales pending heading into March were up by only 15 or by 4.4%. Looks like that will seal the deal for the second slowest first quarter for home sales since 2001.
How can this be with the government paying first time home buyers up to $8,000 to buy a home, and qualified repeat home buyers $6,500, while interest rates have defied the laws of economics remaining at record lows?
Jobs, and confidence. Both are nonexistent in large measure.
What will it take to get the economy in gear? In my humble opinion by getting government out of the way. The following comes from The Heritage Foundation’s The Morning Bell titled; So How’s That Pivot to Jobs Going? There will be a test to see if you can identify the common theme. Here goes:
- At one of President Obama’s many jobs summits, Fred Lampropoulos told The New York Times that businesses were uncertain about investment because “there’s such an aggressive legislative agenda that businesspeople don’t really know what they ought to do.” That uncertainty, he added, “is really what’s holding back the jobs.”
- Dan DiMicco, CEO of steelmaker Nucor Corp, told the Wall Street Journal: “Companies large and small are saying, ‘I am not going to do anything until these things — health care, climate legislation — go away or are resolved.’”
- Porta-King CEO Steve Schulte told USA Today his company is not investing because “proposals in Congress to tackle climate change and overhaul health care would raise costs.”
- The New York Post’s Charles Gasparino reported on the 600 companies stock analyst Peter Sidoti covers: “‘There hasn’t been one bankruptcy,’ he tells me. How did they survive the recession? By cutting costs and hoarding cash, not expanding their business and hiring more people, even as the economy now is starting to recover. During other recoveries, Sidoti says, firms like these would be hiring workers in droves as demand picks up for goods and services. This time around, they’re not — because ‘they don’t know what their costs are going to be.’”
- National Federation of Independent Business chief economist Bill Dunkelberg writes: “The horizon is filled with cost unknowns, from healthcare to cap and trade to yawning deficits and the need to come to grips with them, from paid family and medical leave to card check, from expiration of the Bush tax cuts to state decisions about their finances. Washington cannot expect small business owners, facing difficult economic circumstances anyway, to commit themselves to investing in new employees or equipment and vehicles without acknowledging and revealing the policy-inspired costs that will be imposed on them. It is all about uncertainty and confidence.”
Now, can you tell the common theme from these experts as to why there are no jobs being created? Government. More specific the Obama administration’s social/economic policy agenda. It’s killing the economy. Pure and simple. These transformative proposals with costs that could bankrupt America, and eliminate millions more jobs are not the solution for economic growth.
As long as the progressives in the White House and congress continue to push these agendas we will continue to suffer a jobless recovery. Sad because this economy is ready to explode with growth. Just as with Obama’s tiny electric cars, his utter lack of understanding free market capitalism (or maybe he does), won’t provide the engine for growth. The economy will remain in reverse, or neutral at best unless policies change.
Defeating the proposed health care bill, cap and trade bill, card check bill, and extending the Bush tax cuts would provide the power for the engine of job creation; small business.
With these current economic circumstances spring to local agents in 2010 will be like a Christmas when you wanted the new bicycle and you recieved a sweater. You’ll get something, just not what you wanted.
This presents quite a challenge for home sellers. If demand is weak due to a lack of jobs and confidence, and the market runs at below normal, then selling a home (especially after the tax incentives expire April 30th, and interest rates go up as Bernanke predicts) will become quite the challenge.
Don’t get me wrong, there’s going to be over 3000 winners in the home selling sweepstakes this year. Whether a home seller wins the sweepstakes or not, will be determined by how and who they choose to sell their home. (FYI: Free home seller seminar March 18, 6:00 pm at The Hilton Garden Inn on Dirksen Parkway. fritz@springfieldhome.com for reservations.)
Not to worry. My team will continue to sell homes. There’s bills to pay, and nuts to store.
Maybe next spring more presents will be found under agent’s trees in Springfield Illinois.
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.
