Fritz Pfister

During my 596Th broadcast of Let’s Talk Real Estate I declared the Springfield Illinois housing market a Disney market. It is Goofy.

The weather played a role; home sales skyrocketed up 13.5% in January as fifty degree temperatures were enjoyed. Then winter came in February and March, and home sales fell 10.3% and 16.3% respectively. April arrives and you think the spring market will bring back normalcy to the market. It did in April with home sales rising 7%, however May home sales fell 13.5%, and June is running 3.2% behind last year. Slowing home sales in the Spring in Springfield Illinois? This has occured only three times since 1992. Goofy.

The government has to accept responsibility for negatively impacting the housing market, primarily the governor. Just the proposal of the largest tax increase in Illinois history, to be paid by business, slowed economic activity. Many businesses remain in the cautionary mode as the state government attempts to pass a budget. The leadership challenged governor’s gross receipts tax appears dead, which is good, because the GRT would have killed tens of thousands of jobs had it been approved by the Democrat controlled legislatures. Now the governor continues to propose the sale of the Illinois Lottery to help pay for his new programs. The only problem is the sale of the Lottery will leave a $650 million hole in the education budget annually. The way this governor leads is truly Goofy. Perhaps Disney should erect a statue of Goofy by the secret door the governor uses to sneak into the Capital building on his rare visits to Springfield. The people of Illinois elected, then reelected this governor. Goofy.

The Illinois housing market has been influenced by the sunsetting of the electric rate freeze, and the price of gasoline exceeding $3 a gallon. Less disposable income, the less likely families are to make major purchases. With their budgets being squeezed by higher energy costs, families have tightened their belts, right? No, retail sales in May set records. Goofy.

Then the number of homes for sale skyrockets to record levels with over 1740 listed for sale with local Realtors today. The market year to date has experienced weaker demand with closed home sales down 5.8%. Ask any economist, over-supply combined with weaker demand means home prices decline, right? Wrong again, the median sale price is up 1.5%. Goofy.

Then along comes interest rates shooting past 7% on a 30 year mortgage last week. Thankfully rates receded on Friday to fall back below 7%. Ask any economist what happens to the rate of homes sold in a market when interest rates increase. Home sales slow down right? Wrong again, the procrastinators of the world always rush the market out of fear rates will go even higher. Goofy.

Welcome ladies and gentlemen to Springfield Illinois where we defy the laws of economics daily. The governor defies the laws of economics, logic, reason, common sense, and leadership. The legislature in overtime can’t think of ways to pass a budget without increasing taxes and spending. Then today the state comptroller warns of an economic meltdown within the state if a budget isn’t passed by July 9Th. In the face of all the above, the Springfield Illinois housing market is on the third best pace for home sales in history. Yes, it is a Disney market. Goofy.