Fritz Pfister

Welcome to Springfield Illinois where the housing market historically proves to be seasonal. Typically around 60% of home sales occur in the spring and summer, while the fall and winter account for about 40% of annual home sales, give or take a couple of percent.

The current five year average for the number of closed home sales October through March is 1601. Please note that three of the five years represented the most home sales on record. The five year average for the number of new listings in the fall and winter by local Realtors is 2664. There are 1674 homes listed for sale with Realtors today. You can do the math. If you want some help, that means there are more homes for sale today than will sell and close this fall and winter, not including those that will be listed.

There are several factors influencing home sales today. The first time home buyer tax credit which expires December 1, historically low interest rates, and unemployment which stands at 10% in Illinois, the Springfield unemployment rate for August has not been released yet.

Take a moment and think of cash for clunkers. It remains to be seen if the artificial demand created by the $4500 clunker credit will have a negative impact upon future demand with many economists predicting many car buyers having purchased a car well before they planned to in order to get the tax credit. Will the first time home buyer tax credit have a similar impact upon demand in the next six months? We’ll have to wait and see.

There’s several proposals in congressional committees to extend the credit, expand the credit, and to increase the tax credit. There’s no guarantee that any will pass into law. For the sake of housing markets across the country we can only hope so, because this was the only part of the stimulus plan that actually stimulated the economy.

The historically low interest rates are a primary reason for the uptick in home sales this summer, especially when combined with the first time buyer tax credit. Market data proves the tax credit the bigger influence. Less than 400 of the over 2600 closed home sales this year have been sold over $200,000. It appears that interest rates will continue to hold near historic lows for the foreseeable future due to the snails pace recovery many say is underway within the economy.

Employment is key to future demand. The more people that are working the greater the demand for housing. What happens to demand if the first time buyer tax credit expires, and is not renewed, while many moved up their time table to purchase a home? Where will the jobs come from in a lackluster economy? In the state capital where the governor has announced 2600 layoffs are impending throughout the state, how many layoffs will impact Springfield?

This creates a lot of uncertainty which depresses consumer confidence. It would not be surprising to see home sales fall off from the normally expected levels under these circumstances.

If in fact demand for housing declines more than normal during the fall and winter, and the supply increases, which is the current trend, then there are going to be some great opportunities for those home buyers remaining in the market.

In my experience, now in my 23rd year as a full time Realtor, the best buys of the year happen when the snow is coming in sideways, and the turkey is browning in the oven. Think about it folks. Who has their home on the market during the holidays? Primarily people that have to sell. If about 37% of the home listings will sell this fall and winter, and home sellers know that, who do you think will become more negotiable when receiving an offer; a seller that has to sell, or one that doesn’t?

Welcome to selling a home in Springfield Illinois during the fall and winter. Always a greater challenge for home sellers, and always the best buying opportunity of the year for home buyers.

Of course if you are thinking of buying a home, you can always wait until the crazy spring market when the players (those who don’t have to sell but will if they can get a high price) re-enter the market. Just a couple of questions; Will there be any tax credits available this spring? What will the interest rates be this spring? Food for thought.

Don’t forget your coat while you shop for a great buy this winter.