Weekly Observation for May 8, 2010…New Record For April Home Sales Springfield Illinois
May 8th, 2010The end of business Friday May 7 was the deadline for member brokers to report April home sales. Here’s what the members of The Capital Area Association of Realtors reported for April 2010 compared to April 2009:
New listings; 615 up 138 by 28.93%. Closed home sales; 392 up 105 by 36.58%. Pending listings (includes pending continue to show); 639 up 215 by 50.7%. Average sale price; $126,070 up $4,038 by 3.3%. Median sale price; $106,750 up $1,750 by 1.66%.
Here’s the report for the first four months of 2010 compared to 2009:
New listings 2065 up 361 by 21.18%. Closed home sales; 1085 up 149 by 15.91%. Pending listings (includes pending continue to show) 1780 up 336 by 23.27%. Average sale price $120,514 down $886 by .73%. Median sale price; $105,000 even with 2009.
Get ready for the local media to report how great the market is performing. Expect the first quarter report any day that you received on Let’s Talk Real Estate four weeks ago. Expect the report on record April sales in about two to three weeks.
April 2010’s 392 closed home sales beat the 390 record from April of 2004 by 2 sales. During the boom years of 2003 through 2007 we averaged 373 closed home sales in April. Beating that five year average by nineteen sales is some accomplishment.
The 639 listings that went sale pending is a record for any month in any year. Be prepared to see a new record number of closed home sales for May as a result. The record for May is 459 set in 2006.
Whether a record is set for June will be determined by sales activity this month. The record for June was set in 2006 with 467 closed home sales. Sales pending the first week of May are down 6% compared to last May.
I have predicted we would see a slow down following the expiration of the tax credits. I urged anyone wanting to buy or sell a home to put on their track shoes in my March 13th weekly observations, because between then and April 30th would be the busiest of the year. Now we’re going to get to see if that forecast is accurate.
From here forward the activity within the Springfield housing market will be determined by jobs and consumer confidence. Another factor is interest rates. Fence sitters may be moved to action with the threat of rising interest rates. The stock market meltdown this week granted prospective home buyers a reprieve when investors deserted the stock market for the bond market. This should keep rates at near record lows for a few more weeks.
On the jobs front the national unemployment rate jumped to 9.9% from 9.7% as over 800,000 people without jobs who fell off the rolls reentered the job market. 290,000 jobs were reported to have been created in April, the most in four years, however temporary census takers accounted for 66,000 of the jobs created.
The Bureau of Labor Statistics reported weekly first time unemployment claims fell for the third straight week by 7,000 to 444,000 down from an adjusted 451,000 the previous week. Headed in the right direction, however a long ways from the 350,000 weekly number economists say is expected in a growing economy. About 119,000 new jobs are needed each month just to offset those entering the work force.
This is good news and a step in the right direction, however the U-6 that measures those who are working part time but want full time work, with those who have given up looking, comes in at the second highest level on record at 17.1%.
I am willing to be cautiously optimistic, however there are several areas of major concern that simply can’t be ignored. Small businesses continue to struggle. Big business and Wall Street are profiting at the expense of small businesses, and 15.3 million Americans without jobs, due primarily to new federal laws, regulations, and bigger government.
The renewed attempts to pass Cap and Trade legislation that could add $160 billion in annual costs to consumers. The Bush Tax cuts set to expire at the end of the year will harm mostly small business owners. The financial meltdown in Greece threatens to spill over into Spain, Portugal, Italy, Ireland, and Britain ultimately impacting the U.S. economy. That would be bad news for export manufacturers just beginning to recover.
The CBO projects ten trillion dollars will be added to our debt in the next decade. People and businesses see this as a threat to producing massive tax hikes. The rising costs for health care and the $563 billion in new taxes all to be extracted from the private sector. Several major companies are talking of dropping employer paid health insurance as the fines under Obamacare are less expensive. This will increase insurance costs for millions of workers.
Finally the state of the state of Illinois. Election year legislative wheel spinning, and political posturing will result in a deeper deficit, increased monies owed to vendors, and another budget shortfall. None which will do anything good for consumer confidence.
When you add the states woes to the Obama administrations higher taxes, increased regulation, and bigger government, that doesn’t seem to me to be the right formula for creating an economic environment to create jobs or to sustain any recovery. Perhaps I’m wrong, and hope I am, however businesses facing higher costs from taxes, legislation, and regulation probably won’t be too anxious to add to the overhead with new hires.
So when all the rosy stories about the surge in home sales begin to appear, don’t be fooled. It takes time to close out home sales. May and June will be the beneficiaries of the tax credit generated sales pending from March and April.
Where the local housing market is headed and where it will end up, will be determined by sales pending now through July. The closed home sales in April and May are just about history. If you need to sell your home, it really doesn’t matter what has already happened, rather what is happening now.
Make this a great week from Fritz and Kristie Pfister and The Pfister Success Team Inc. of RE/MAX Professionals Springfield. It would be an honor to serve you. Call us at 652-7653.
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.
