Fritz Pfister

The consistency in the number of home sales within the local housing market is the envy of the state. While the nation bemoans a struggling housing market with falling sales and prices, and the state of Illinois reporting similar results, good old Springfield, and central Illinois keep right on ticking. Considering that 2003, 2004, and 2005 were seller’s markets, and 2006, and 2007 were buyer’s markets; look at the consistent number of residential sales in those years as reported by member brokers to the Capital Area Association of Realtors (CAAR) MLS:

2003 3996
2004 4005
2005 4197*
2006 4175
2007 3998

*CAAR record high

The rise in the median sale price of a home in the face of an oversupply of homes for sale, defies the law of supply and demand as witnessed below:

2003 $90,500
2004 $92,750
2005 $100,000
2006 $99,000
2007 $104,500*

*CAAR record high

The only reason 2006, and 2007 were buyer’s markets was due to the record number of homes for sale. Although demand remained steady, supply skyrocketed. Below is the number of homes for sale to begin the year, number of listings added during the year, and the total available by year:

year # to begin # added total
2003 1159 5046 6213
2004 1009 5571 6580
2005 1203 6371 7574
2006 1540 6542* 8082*
2007 1521 6439 7960
2008 1604*

*CAAR record high

There’s more to the story for 2007. A record number of listings did not sell with the supply of homes vastly outnumbering buyers. A record 2362 home listings expired without a sale, and 1174 home listings withdrew without a sale. There were 367 more pending contracts failing to close than in 2006, resulting in a record 1554 home listings going back on the market.

The great news to begin 2008 is that interest rates fell below 6% for only the second time since the 1960’s. That should provide motivation for indecisive home buyers to purchase. CAAR also reported closed home sales were up in December, however sale pending listings did fall in December which will be reflected in the number of closings in January.

It may have been a struggle for home sellers in 2007 due to excessive numbers of homes for sale, however overall it was a good year in the local housing market. There are hundreds of markets that would trade places in a New York second, proving once again that real estate is local. In spite of the negative psychology within the housing market created by the main stream media, flat job growth, incompetent state government, a tax and spend governor, and the highest interest rates in two years throughout most of the year, 2007 in Springfield Illinois turned out pretty darn good.

Just imagine how good the local housing market could have been, and would be if there were; responsible journalism within the media, there was a functioning state government, and there was a governor with policies that encouraged business growth, and lower taxes; which creates jobs.