Fritz Pfister

Happy New Year on this morning of January 1, 2009! This housing report shows trends heading into 2009 based upon reports to The Capital Area Association of Realtors MLS by member brokers. The December, fourth quarter, and year end are preliminary, and are based upon reported activity as of the end of business December 31, 2008. These figures will change as brokers report end of month activity. By how much? We’ll have to see, however be assured you will receive the information here first.

The following are year over year comparisons to 2007.

Let’s start at the beginning with the first quarter of 2008. The year began with 1604 listings available for sale, 2009 begins with 1618. The number of new listings taken fell by 203 (-12.8%) to 1376, the number of closed sales fell by 158 (-19%) to 670, the number of sales pending fell by 191 (-15.9%) to 1009, while surprisingly the median sale price was up $5,500 (+5.9%)  to $99,000.

The second quarter had new listings taken down 56 (-2.9%) to 1873, the number of closed sales fell by 158 (-12.6%) to 1091, the number of sales pending fell by 153 (-10.3%) to 1320, while the median sale price increased $1000 (+.93%) to $108,000.

The third quarter had new listings taken down by 208 (-11.9%) to 1537, the number of closed sales fell by 83 (-7.4%) to 1035, the number of sales pending fell by 182 (-14.3%) to 1087, and the median sale price declined by $2250 (-2.0%) to $105,000.

The preliminary report for the fourth quarter had new listings down by 38 (-3.3%) to 1112, the number of closed sales down by 152 (-18.3%) to 677, the number of sales pending fell by 167 (-19.8%) to 676, and the median sale price declined by $7,000 (-6.8%) to $95,000.

Preliminary reports for December have new listings taken up by 120 (+52%) to 350, the number of closed sales down by 42 (-18.5%) to 184, the number of sale pending down by 26 (-12%) to 189, and the median sale price declined by $27,750 (-24.4%) to $85,750.

Preliminary reports for 2008 have new listings down by 504 (-7.8%) to 5899, the number of closed home sales down by 551 (-13.7%) to 3473, the number of sale pending down by 693 (-14.5%) to 4092, and the median sale price down $500 (-.47%) to $104,000.

A couple of caveats here in addition to final reporting; the number of new listings taken in the fourth quarter are inflated due to the merger of the second and third ranked producing brokers. Agents have begun withdrawing listings from their old company, inflating the number of withdrawn listings, then filing them as new listings with their new broker, inflating the number of new listings taken. The trend in the number of new listings coming to market continues to decline year over year, however the percentage will be distorted as a result of this merger.

If you took notice the trend established in 2008 was down for closed and pending home sales; in decline every quarter. End of December reporting will not change that trend.

The median sale price will change with end of year sales reporting, however to what degree is hard to tell. This does not change the fact that the median price started up by 5.9% in the first quarter, declined to a less than 1% increase in the second quarter, then fell in the third quarter by 2%, and the fourth quarter fell by 6.8%. The 24.4% decline in December hopefully will improve after final reporting.

The final analysis for 2008 is simple; it was a down year for home sales in 2008. The decline continues into 2009 with sales pending declining double digits in the fourth quarter. There were 216 home listings reported pending closing on January 1, 2009. Unfortunately the number on January 1, 2008 isn’t available, however there were 267 reported sale pending on January 5, 2008.

It makes perfect sense that the median sale price would begin to decline with the falling number of sales while the inventory of homes for sale continued at record levels, in spite of the decline in the number of new listings taken during the year. The surprising point is that prices didn’t start falling sooner in the year.

In my opinion the shock of the credit crisis within the banking , and securities industries announced in September, followed by unprecedented federal government bailouts in October, and November are the reasons for the larger than expected decline in the local housing market in the fourth quarter. The saving grace are interest rates which have fallen to 50 year lows. This sparked not only a refinance boom, it made home buyers sitting on the fence take action, or the sale numbers for the fourth quarter could have been much worse.

This preliminary report is not intended to be doom and gloom. Lord knows everyone has had enough of that reporting. These are merely the facts so home sellers, or soon to be home sellers can be informed.

If there is one thing that gets consumers into trouble when buying or selling a home, it is their belief they are fully informed. I agree with Mr. Keller CEO of Keller Williams Realty in Austin Texas who said; the problem is most people receive their information from the media, family, and friends. When one believes they are fully informed, when in fact they are only half informed, or misinformed, that usually leads to poorly formed decisions.

The most accurate and recent information about the Springfield Illinois housing market can be found right here, and by listening to Let’s Talk Real Estate every Saturday morning at 10am, streaming live on WMAY.com.

Wishing you a Happy New Year, and a year that will be prosperous for you. For the whole story, for the information necessary to form good decisions, continue to visit SpringfieldHome.com.

Thanks for visiting.