Weekly Observation for December 31. 2011 December, Q4, & 2011 Preliminary Home Sales Report for Springfield Illinois
December 31st, 2011As we have been sharing with you since the financial meltdown, home sales will be determined by job growth. Although the unemployment rate has dipped to 8.6% that is understated, because that no longer counts 6 million people who have fallen off the unemployment rolls. The unemployment rate is below 9% not due to more jobs, but due to people not being counted. If we were to compare the number of people out of work with the number of jobs at the end of the recession, the unemplyment rate would be 11%.
We’ve had good news the past two weeks for initial unemployment claims, up this past week to 385,000 however the four week moving average is 375,000. That is the magic number according to economists that they say indicates significant job growth that could bring down unemployment.
Averaging 110,000 net new jobs monthly this year through November isn’t going to bring down unemployment. Professor Judd has shared with us that 300,000 net jobs a month need created for 36 straight months to lower the unemployment rate to under 7%. So the news is good but we have a long way to go. Over the next couple of months we will see if this is a trend or due to seasonal hiring and Christmas sales.
The following are the preliminary home sales figures as reported by member brokers to the MIS of The Capital Area Association of Realtors. Brokers have until January 6 for final reporting, so these numbers will change, by how much we’ll have to see.
The following compares December 2011 to December 2010: New listings taken 224 up 5.16%. Sold and closed 258 down 1.9%. Listings going under contract 222 up 7.76%. Median sale price $99,950 down 2%. Days on market 121 up 2.73%.
December compared to the five year average from 2006 through 2010. Closed home sales up 13.5%. Listings going under contract even.
Q4-2011 compared to Q4-2010: New listings taken 900 up .78%. Closed home sales 733 down 4.43%. Listings going under contract 772 up .39%. Median sale price $105,000 even. Days on market 109 up 2.98%.
Q4-2011 compared to the five year average 2006-2010: Closed home sales down 10.2%. Listings going under contract down 8.7%.
2011 compared to 2010: New listings 4874 down 5.61%. Closed home sales 3209 down 6.74%. Listings going under contract 3957 down 4.78%.
2011 compared to the five year average 2006-2010: Closed home sales down 14.9%. Listings going under contract down 11.3%.
Due to the lack of jobs adding to demand for homes, with the lowest interest rates ever recorded during 2011, the local MLS will register the fewest home sales since 1998. That comparison is made by deducting home sales from Jacksonville who joined the association in 2005, and Taylorville in 2000.
The local association probably will just look at the raw numbers and compare them to year over year including the additional sales from Taylorville and Jacksonville. If they report in that manner they will report the fewest home sales since 2001. However those would not be comparing apples to apples.
The 3209 closed home sales compares to 3236 in 2002, and 3,172 in 2001 which did not include Jacksonville sales who didn’t join the MIS until 2005. The preliminary number of closed home sales in Jacksonville for 2011 are 293. To do a fair comparison you must deduct Jacksonville’s 293 from 3209 for 2916 home sales in 2011. That is how to arrive at a true comparison of home sales comparing year to year.
With the dust up at the National Association of Realtors double counting some sales, and having to correct the number of reported home sales back to 2007 downward by 14%, shows the housing market was in worse shape than reported.
You can have absolute confidence in the numbers shared with you here. Two weeks ago I reported to you the alleged unethical and potentially illegal actions of some agents having for sale by owners signing listing agreements at closing, or after sale contracts had been negotiated. This will not affect the number of sales reported by the association. This is a practice by agents to puff up their production numbers due to ego, rankings, and to attempt to obtain business utilizing potentially false advertising.
As stated here two weeks ago, the only way to determine if this alleged practice is ongoing is to have an audit. After checking with legal council the association was advised not to conduct an in house audit, which surprised me, but is understandable. CYA. The association said the only way to determine if this unethical practice is taking place by local real estate brokers would be for someone to file a formal complaint with the State of Illinois IDFPR to perform an audit. Until this happens we won’t know if this action is taking place for certain, and if it is, who are the offending brokers and agents.
There you have it folks. Home sellers have the biggest challenge to get sold since 1998. Home buyers have the world by the tail with interest rates the lowest ever recorded. What can home buyers and home sellers expect in 2012 in the Springfield housing market? See my predictions posted today at SpringfieldHome.com, or listen live at 11am central at Wmay.com or on the radio on AM970.
This is your resource for the most current and accurate information regarding your local real estate market. Call us at 217-652-7653, we have immediate openings for 19 new listings to market in the first quarter of the new year. Call if you want to sell your home.
For you considering selling your home in 2012 register for my free no obligation home seller seminar to be held Thursday January 26, 6:00pm at the Hilton Garden Inn on Dirksen Parkway Springfield IL. This ain’t your Daddy’s real estate market. We have entered a new economy. The number of home sales has fallen by nearly 1,000 sales in just 4 years. Learn the process, learn what needs done to succeed. Call 652-sold for reservations.
The opinions expressed here are solely those of Fritz Pfister or identified sources, and not necessarily those of RE/MAX Professionals of Springfield or RE/MAX International.
