Weekly Observation for January 7, 2012: Home Sales Springfield Illinois 2011, Stunning
January 7th, 2012Today I celebrate the 16th anniversary for Let’s Talk Real Estate on WMAY and launch my 17th season. We’ve witnessed some amazing changes in the real estate industry and in the local housing market during that time. Some amazing and yes even stunning developments in the local market.
Don’t know why but this morning the song Glory Days by Bruce Springsteen kept playing in my mind. In 1996 while the rest of the nation was experiencing a booming real estate market Springfield was plugging along stuck in a buyer’s market since mid 1994 when interest rates went up. That changed in 1998 and home sales were great through 2007. Our boom years were 2003 through mid 2008 when gas went over $4 a gallon preceding the financial meltdown, housing collapse, and we’ve not been the same since.
Compare the glory days of 2005, 2006, and 2007 that posted 4182, 4176, and 4024 home sales respectively, with 2009, 2010, 2011 with 3719, 3441, and 3216 home sales respectively. In the year 2011 with the lowest interest rates on record, home sales have declined by nearly a thousand from the glory days to the fewest since 1998. Simply stunning.
But it is what it is. Here’s the final numbers as reported by member brokers of The Capital Association of Realtors to the MIS, this is not the official report which the association releases in a few weeks; home sales 2011 compared to 2010: 3216 down by 6.53%. The median sale price sets a new record high of $110,000 exceeding last year by $100. The days on market to a contract for the 51% of listings that closed, 107 up 7.13%.
December home sales year over year were up by 2, sales pending up by 18, median sale price down 1.96%, and days on market 119, almost four months to contract. All with new record lows established for mortgage interest rates. On a side note The Mortgage Bankers Association reported the fewest mortgage applications for purchases in 15 years in America.
Last week I shared with you my forecast for 2012, predicting a 2% to 4% decline in home sales, and a decline in the median sale price based upon the lack of job creation. As the jobs market goes so will go the housing market.
I know, I know, you have been bombarded with good news about 200,000 jobs being created in December. Don’t take me wrong I am ecstatic whenever there is good news on jobs, but this was no big deal. This is another example of the media cheerleading. Strange, back in 2004 when a Republican was running for reelection the media said the 5% unemployment rate was terrible and the Democratic candidate called it the worst economy since the Great Depression. The media bias toward the left is palpable. Why do they even try to hide their prejudice? If it were up to me every reporter at a White House press briefing would be required to wear a cheerleading outfit.
Don’t get me wrong here either, I am an Independent, but conservative. The administration and the media are liberal. Both political parties are and have failed the people of this nation. It’s all about power, control, money, and our very system of governance to them. The people’s interests are secondary.
Why the 200,000 jobs in December, when 150,000 were projected isn’t a big deal? Because Morgan Stanley reported 42,000 of those jobs were temporary UPS and Fed Ex jobs for the holidays. More people shopping on the Internet you know. That leaves us 158,000 jobs, barely more than needed to meet population growth. If divided equally among the 50 states that would be 3160 jobs for Illinois. At last report I believe there were in the neighborhood of 680,000 out of work. Do the math.
The president and the media crow about numbers in the millions that sound good but are pathetic. We are now entering the 11th quarter since the official end of the recession without a jobs recovery, after having added trillions in debt onto future generations. Of the seven recessions since WWII the average number of quarters to a jobs recovery are 3. Please don’t tell me how well current economic policies are working and have us heading in the right direct. America is still six million jobs behind the number we had in December of 2007 when the recession was officially declared to have begun.
The media and administration crows about an 8.5% unemployment rate. This is purposely understated because the government changed the way they calculate the unemployment rate back in the 1990’s that has benefited both parties when in power by making unemployment sound better than it is in reality.
The Gallup organization does their own reporting on unemployment. They too report the rate at 8.5%, however the underemployment rate they report at 18.4% is reported by the government to be only 15.2%. Who you going to believe? How can these numbers differ so greatly? Because what the government changed in the 1990’s was to no longer count anyone who dropped off the unemployment rolls. Guess those people no longer exist.
I’m fed up with both parties, and the media. The American people are being misled for election purposes. We need to get Americans back to work. We need to get big government off our backs. Big government has been foisted upon us by both parties but none more so in our history than the Obama administration. This prevents recovery, while the cheerleaders in the media and administration tell you differently.
I’m sticking by my predictions that we will see further contraction because cheerleading doesn’t create jobs. Sound conservative fiscal policy, cutting spending, reducing costs, and lifting regulatory burdens from the private sector creates jobs. There is no question in my mind this country is ready to explode in growth, and there is no question in my mind that it is government that is preventing it.
That however is not the rest of the story. Not only does the private sector business owners have to contend with an oppressive federal government, we live in Illinois where Moody’s just declared us the biggest deadbeat and credit risk of all states. Talk about a double whammy.
Guess when you look at what we’ve allowed our politicians of both parties to do to us in this nation and in this state, we shouldn’t be stunned about home sales in our market in 2011. We should be stunned we’re only down about a thousand sales from the glory days.
What does politics have to do with the Springfield Illinois housing market? Everything and 2011 just proved it.
Thank goodness this is an election year where can reelect the same people that have done such a stellar job. All I know is this, if we keep electing the same people, excepting those who have stood on sound fiscally conservative principle, and continue with these same economic policies the sink hole called Illinois, and America, the world’s largest debtor nation, won’t be able to be seen with the Hubbell telescope.
Being the eternal optimist, I am hopeful that the people wake up and make drastic changes when they vote. That is our only hope for economic recovery, a brighter future for our children, and another shot at future glory days.
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.
