Fritz Pfister

In my opinion the news this week is telling us the attitude of the American consumer, and it’s not good. Reported today in the SJR Marketplace section (11-15-08) is that retail sales fell by the largest amount on record. What grabbed my attention was the decline was greater than the decline following the attacks of 9-11-01. Are the problems the American consumer faces today greater than on 9-11?

Consumer spending is the fuel that drives the economy. The ripple effect as businesses cut inventories due to lower demand from consumers, results in job losses in the production sector. Fewer jobs means fewer home buyers at a time when there is a near record number of homes for sale.

Money Magazine named the top 100 cities to live in the country this past week. Springfield Illinois was not on the list. However the report stated that the number of jobs in Springfield grew by 5% between 2000 and 2007. Kind of reminds me of those turtles featured in the ad promoting high speed Internet.

It appears from these reports that the economy will continue to slow down. How should we react to this reality? I for one will continue to do the best job I can to help local home sellers get sold, and local home buyers find the right home at a fair price. I choose not to be part of the slow down.

This is what I recommend each of you do. Whatever your chosen profession, be the best you can be. Productivity will be key to turning this economy around. Productivity begins with your attitude.

We continue to see the effects of the slowing economy in all areas, private and public. Illinois Comptroller Dan Hynes reported this week that due to falling tax revenues the state is behind $4 billion in payments to state vendors, which could increase to $5 billion by March, and that it is taking 20 weeks to pay a bill once received. Lord knows how long the billing was held before reaching the comptrollers office. As a result many health care providers are now refusing medicaid patients.

This impacts the local economy as service providers and vendors for the state go unpaid, and must borrow to make payroll to continue to stay in business. This may likely lead to additional job cut backs for these vendors, if not entire business failures. It’s hard to stay in business when your client doesn’t pay.

The impact of the slowing economy is showing in the local housing market. I reported here last week that in spite of home listings going under contract falling by double digits three straight months, closed sales were holding steady. The falling sales pending are apparently catching up as closed sales the first half of November are down by over 31%.

So far this year the number of closed home sales is down by 12.2%, or by 439 home sales. This is tracking for around 3500 home sales following 4 consecutive years that surpassed 4000 annually. This is not a collapse, however it is painful to hundreds of home sellers.

Do not be dismayed! Opportunities abound for families in the market to buy a home. The inventory of homes for sale stands at 1875 today, a six and a half month supply as we enter the historically slowest selling season of the year. Do you think serious home sellers aren’t prepared to deal with you?

The opportunity for home buyers that desire to buy new construction is the best in years. The Springfield Illinois market is on pace for 220 to 230 new home sales in 2008, down nearly 33% from the high of 339 set in 2005. The 168 listings of new construction available for sale today represents an 8.6 month inventory. The opportunity to make a deal with a home builder has never been better!

Yes these are tenuous economic times, however we shall survive, and might I suggest there will even be those that thrive. I choose to be in the thrive category. I hope you make the same decision. If we all collectively decide to do our best at our chosen professions, to be as productive as possible, then the local economy can prosper.

With Veterans Day occurring this past week I am reminded of a commander during the Korean War. With 300 troops, low on ammunition, in below freezing temperatures, and surrounded by over 10,000 Chinese soldiers, what did this commander say to his troops? “They can’t get away from us now!” Or the commander during the time of the Battle of the Bulge when surrounded and vastly outnumbered by the Germans when the Americans received an ultimatum of surrender now or everyone dies. What was the American commander’s response? “Aw nuts!”

That’s the American spirit in action. We face far less daunting challenges. “Opportunity can’t get away from us now!”, and “Aw Nuts” let’s get to work!

This is economic war. With the proper attitude, the rekindling of the American spirit, and dedication to be the best you can be, prosperity for all can be achieved. In this regard President elect Obama is correct, the economy will be saved from the bottom up. It is up to each of us individually as to how we will react to the circumstances of today. What do you choose to do?