Weekly Observation for March 6, 2010 Housing Market Trends Springfield Illinois
March 6th, 2010The final numbers are in for February 2010 home sales. Before we get to those numbers, here’s something for you to consider. For months I have been sharing with you that going forward the success of the housing market would depend upon jobs, confidence, and interest rates.
Here is the first sentence of my weekly observations from last week; “Ought oh. During the State of the Union Address on January 27 President Obama told America he was pivoting from health care reform to making jobs his number one priority.”
Now here is the title from The Heritage Foundation’s Morning Bell Article published yesterday; ”So, How’s That Pivot to Jobs Going?” Seems the Heritage Foundation and I are on the same page. I recommend you become a member of The Heritage Foundation for in depth analysis on the economy, government programs, national security, and issues of the day. The Morning Bell article supports what I have been warning against the past ten months. Here’s one paragraph from the article:
- National Federation of Independent Business chief economist Bill Dunkelberg writes: “The horizon is filled with cost unknowns, from health care 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.”
This was one of five supporting points of view from various industry leaders. If jobs are key to the housing market across the nation and here in Springfield, the federal government needs to change direction. Unfortunately it doesn’t appear the Obama Administration is listening. Yesterday from The Foundry at The Heritage Foundation article “Long-term Unemployment Still Too High” comes this message;
The stock market reacted favorably this morning when it was announced that the number of people on payrolls fell by 36,000 in February, better than the 50,000 loss expected by economists. The unemployment rate held steady at 9.7%, also slightly better than expected.
Another indicator that may have received less attention is the 15-Week unemployment rate—the percent of the labor force that has been unemployed for 15 weeks or longer and is still looking for employment. In December, 2007 this statistic stood at only 1.6%. In February, 2010, it was 363% higher at 5.8%. This, after three “stimulus” bills during the time frame is proof that the idea that we can “spend our way out of recession” is for the birds. In fact, after rising the astronomical 363%, the rolls of those unemployed 15 weeks or more has only declined by 147,000 since it peaked in November of 2009 at 8 million 976 thousand people looking for work.
Folks this is the reality in America today. Confidence by business is too weak to begin hiring until health care, and cap and trade are resolved. The heavy costs that will be placed upon businesses for these transformative programs is too great to consider hiring until their fate is known. If either healthcare or cap and trade, or both passes then businesses can budget for the future. Passage of these bills means more job losses, defeat of these bills means jobs growth. For now uncertainty reigns.
Another great reference in support of my positions on job creation was published in the Business News March 3 edition of the SJR. Richard Judd is National City Distinguished Professor Emeritus at The University of Illinois Springfield. Judd’s article “Get serious about job creation” spells out clearly what I reported here last week; that the jobs bill in consideration in congress today “will not make a dent in our massive unemployment”. Actually I said it is like taking a squirt gun to a 6 alarm fire. Judd lays out the actions necessary to create jobs, and it is all about small businesses being the engine for job growth.
The Obama Stimulus bill not only failed to create the 3.5 million jobs as predicted, 3.4 million jobs have been lost since passage. As Charles Krauthammer said; the only thing the Stimulus bill accomplished was to put a trillion dollar hole in our budget. In my opinion this is due to the Stimulus bill containing nothing for small businesses.
As Professor Judd and The Heritage Foundation fellows explain, there will be no significant job growth unless small businesses begin to hire. With the current policies that’s not going to happen, and the jobless recovery will be extended. In fact the threatened taxes contained in health care, cap and trade, combined with the expiration of the Bush tax cuts threaten the very existence of many small businesses. It is simply unaffordable and could cause the loss of an additional 1.6 million jobs according to Heritage studies.
Back to the Springfield February 2010 home sales report. For the ninth consecutive month brokers have reported a year over year monthly increase in home sales. The 218 closed home sales were up 10.1% from 198 last year. For the first time in 9 months the median sale price declined by 1.26% to $97,500 from last February’s $98,750. Sales pending combined with pending continue to show was up by 4.4% to 357 from 342 last February. A paltry increase of only 15 sales pending.
Some will pronounce the increase in home sales as good news, I’m not so sure. To me it is comparable to Harry Reid saying; good news only 36,000 people lost jobs in February. I’m fairly confident that wasn’t good news for 36,000 families.
Considering a backdrop of tax credits and record low interest rates, and expectations the first four months of 2010 to be the most active of the year with tax credits expiring April 30th, the 218 home sales were second lowest since 2001 exceeding only last year. Same trend as January. The second slowest market since 2001 year to date. Anemic I would say in light of the incentives. Probably the result of spent demand from the original tax credit last year leading to record fourth quarter home sales.
If now to April 30th in fact turns out to be the most active of the year, it will be a long year for home sellers. One good reason if you are considering selling a home to register for my free home seller seminar on March 18. Call 391-1811 or e-mail fritz@springfieldhome.com to make your reservation. The seminar begins at 6:00 pm at The Hilton Garden Inn on Dirksen Parkway. It may mean the difference between success and failure. A small investment of your time could provide big dividends in your home sale effort.
Make this a great week from Fritz & Kristie Pfister and The Pfister Success Team Inc. at RE/MAX Professionals Springfield. It would would be an honor to serve your family. We have immediate openings for home listings. Call us at 652-sold (7653) when you want to sell your home.
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.
