Fritz Pfister

With Spring and Easter comes new life and new hope. The burst of activity in the Springfield Illinois housing market which began mid February shot preliminary closed home sales figures up 12.6% for March ‘09 over March ‘08. This pumped new life into the housing market, and saved the first quarter following dismal sales in the first two months of the year.

The really great news is that the median sale price in March over March was up $10,000 to $115,750. The median price had been down 2.8% the first two months of the year, however on the strength of March home sales, first quarter over first quarter median sale price finished up $6,500 or by 6.65%!

This is welcome news to a historically stable housing market which suffered its first significant slowdown in home sales in 2008 in over a decade. Private mortgage insurance companies downgraded Sangamon and Menard counties to declining status in the fall of 2008. Should home sales activity continue to be strong through June, and hopefully will, the declining market status will be dropped.

The impetus to the renewed market activity are interest rates, and tax credits. When interest rates go down more people can afford to buy a home, and home prices usually go up. The tax credit for first time home buyers has stimulated activity, however jobs are the key to how many homes will sell this year.

You can have the best interest rates in the world, and tax incentives, but you need people with jobs to be able to take advantage of this great opportunity. With unemployment nationally up to a 25 year high 8.5% (can you imagine 25% during the Depression?) Springfield Illinois still fares better than state or nation. March unemployment numbers for Springfield have not been published.

The local housing market should remain strong through May, and hopefully into June. There’s no guarantee. Sales pending actually slipped a little coming into April and are down 6.8% from last year on this date. This causes some concern. Why would sales level off when you have the lowest interest rates on record, federal tax incentives, and state grants available? Jobs.

Two weeks ago Realtors in the MLS posted 111 sales pending, going over 100 for the first time since August of 2008; last week only 80. We may see some light coming through the trees, but this tells me we are not out of the woods yet.

The opinions expressed are solely those of Fritz Pfister, and not RE/MAX Professionals of Springfield or RE/MAX International.