Fritz Pfister

With one week remaining to close out 2007 business for the Capital Area Association of Realtors, the picture in Springfield, IL. is bright. For the fifth consecutive year local Realtors have closed over 3900 home sales. Closed sales are off by only 4.8%, and have remained within the 3900 and 4200 level since 2003. The median sale price is at $104,000 up from $99,000 in 2006.

Steady demand, rising prices, and modest numbers of foreclosures means the housing slump reported in the main stream media on an hourly basis for the past couple of years has not arrived in Springfield, Illinois. The media’s efforts are now to try and perpetuate a recession. What is with these doom and gloom people? It is obvious that the main stream media has an agenda to elect a Democrat president, but enough already.

November retail sales were up 1.1% surprising AP writer Martin Crutsinger as he reported “the better-than-expected surge lessened fears of imminent recession”. I’m beginning to believe AP stands for Anti-American Propaganda! No serious economist is talking about a recession, let alone an imminent recession. OK, some economists have predicted the odds of a recession at 40%. Did they volunteer this estimate or were they prodded by a recession hopeful media? Economists, and journalists have accurately predicted eight of the last two recessions.

The third quarter 4.9% growth in GDP was confirmed this week as accurate, the best in 5 years, and by the way, November spending was the best in 3.5 years. The projected 2.9% growth in the fourth quarter is just that; growth. You can’t have a recession unless you have two consecutive quarters of negative growth. Is everything rosy in the economy, of course not, however it is never as bad as the main stream media reports, and many reporters like Crutsinger are less likely to be reporting the whole story rather than their biased opinion as evidenced on December 22. At the very least reporters such as Crutsinger attempt to find any evidence that supports their predetermined world view, attempting to make that view become reality.

The local State Journal-Register should be ashamed as well. Their headline editor supports the fallacy of a recession, or at minimum helps promote recession due to their sub-headline “Consumers put aside worries about recession”. No knowledgeable person is worried about a recession when the unemployment rate is under 5%, there is solid growth in the GDP, interest rates are near record lows, and consumer spending remains strong. The credit crunch will work itself out through the market, and will not cause recession. Unless the media succeeds at making the credit crunch story to cause consumers to pull back on spending. Food and fuel costs are a much greater threat to consumer spending than any sub-prime melt down.

The only people that hope for recession are the main stream media and Democrats. Remember John Kerry saying in the 2004 election that this was the worst economy since Herbert Hoover? With the complicity of the main stream media Democrats are up to it again in 2008. Iraq has improved and is no longer a legitimate campaign issue, so the Democrats have to try and make people believe the economy is headed toward recession, and that they are the only party that can save the economy, which does not need saving. If you want to see a recession elect a Democrat President, every Democrat candidate wants to raise your taxes, in spite of record revenues flowing into D.C. as a result of the Bush tax cuts. Since the Democrats plan for retreat and defeat in Iraq has been sidetracked by our brave military, and General Petreaus, watch for an all out assault on the sensibilities of the American public with Democrats twisting the facts about economic conditions, which will be echoed by the agenda driven, journalistic void within the main stream media.

The prediction for the local housing market is good to begin the year, however will slow as we approach the election. Expect another year of closed home sales between 3900 and 4200, stable to rising prices, and an oversupply of homes for sale. The market will continue to favor buyers due to surplus inventory combined with near record low interest rates. Flat job growth locally in 2008 will hinder any significant increase in home sales, however that all will change in 2009 as major projects underway begin to take shape and create permanent jobs. Flat job growth and the media are the biggest hindrances to the housing market in 2008.

If a Democrat should get elected President, taxes are raised, security is weakened, the borders remain open, and government programs are expanded, then you could see a real housing slump. Just look to the socialistic governor of Illinois, Rod Blagojevich and the Democrat led House, and Senate. The lack of leadership is appalling, has the state headed toward bankruptcy as the governor enacts all his feel good social programs with no way to pay, and without legislative approval. His efforts to pass the largest tax increase in history, seven point eight billion dollars would have crashed the economy overnight, as businesses would have used Illinois’ open borders to escape, as many did when the Democrats raised every fee in the state by incredible amounts, sometimes fourfold previous fees. A note to Democrats, fees are taxes.

Just look to Illinois and the dysfunctional leadership by an all Democrat controlled government impeding economic growth, the Democrat controlled New Orleans, or the ineffectiveness of a Congress and Senate led by Democrats Pelosi and Reid to realize the disconnect between what Democrats say they will do for America, and what will happen in reality.

The housing market in this central Illinois community will remain good in 2008, however forecasts for 2009 in the local market will be even better as more jobs are created. However, should a Democrat win the presidency increasing taxes and expanding ineffective, unaffordable government programs, the forecast for 2009 will change.

Higher taxes always hurt the economy, negatively impacts the purchasing power of consumers by reducing disposable income, and gobbles up investment money that could have been spent on economic expansion. Higher taxes simply means more money to D.C. to be wasted on yet more government largess, less money for you to spend on goods and services, resulting in less money for companies to invest to create jobs, growing the economy for everyone to benefit. Higher taxes never result in more money going to the government to pay for the programs promised to buy votes. Higher taxes never produce the intended results. Higher taxes always cause unintended economic consequences.

The fate of the economy and therefore the housing market in 2009 and beyond will be determined by whether voters elect politicians who believe government is the answer to all problems, and should provide cradle to grave entitlements through higher taxation, bumbling bureaucracies, and ineffective programs; or politicians who believe in our current capitalistic economic system which provides opportunity for all, believes you should keep the money you have earned through lower taxes to spend or save as you desire, and believes in individual responsibility.

The value of your home, your ability to sell your home, the ability to buy a home, and the weight of your wallet will be determined by the economic consequences of the policies enacted following the 2008 election.