Fritz Pfister

The famous tax credits in the Stimulus plan of 2009 and 2010 did little to affect the housing market except to change the timing for home purchases. The impact of the tax credits drove sales up in the first half of 2010 by stealing demand from the second half of the year which saw home sales fall over 26%.

The Springfield market saw improvement in the fall, however the summer had the fewest home sales on record since 1997. Due to this aberration in sales resulting from the tax credit we will see a marked increase this summer over last summer.  Because we are comparing local home sales to an incredibly slow market we better hold our jubilation down until we see how sales compare to historical data, the five year average, and not to just a single year.

To place this in proper perspective for you the five year average in the third quarter from 2005 through 2009 was 1121 home sales. In 2010 we had 762 home sales in the third quarter. That’s 359 or 32% fewer.

Although it is normal to see in excess of 100 home listings go under contract weekly during the spring months we have only eclipsed that mark 3 times this year. The last time local Realtors eclipsed 100 homes going under contract for a week was the week ending May 7.

We are now seeing slow but steady growth building within the market with Realtors posting 93 sales pending a week ago and 96 this week. The first back to back weekly gains in listings going under contract since April. There has been no consistency to demand within our market. Hopefully this trend continues and we will build momentum through the summer.

The news from across the nation continues to show the housing market struggling. Case Shiller reported a double dip recession in home prices, existing home sales fell, new home construction continues to run at less than half the pace considered for a healthy market, and foreclosures although falling due to paperwork delays, have four million Americans in serious delinquency. Foreclosures will be a factor for several more years.

The initial claims for unemployment fell this week to 414,000, however the four week average was unchanged at 424,750. The same with the Thomson Reuters/University of Michigan survey. The preliminary reading on the overall index on consumer sentiment was 71.8, down from 74.3 the month before. As one economist said, with all the headwinds in the economy confidence still moves sideways.

Falling gas prices will help, however are still too high running about a dollar a gallon above last year at this time. It’s the old good news bad news about gas prices. It’s good they are falling but it’s bad because they falling due to weak demand in a slowing economy.

The primary concern for consumers remains jobs which is helping drive down confidence and consumer spending following a disappointing jobs report in May. Jobs are the most important ingredient as to whether or not the momentum in home sales can be maintained here in Springfield. We already have two primary ingredients that are favorable to home buyers, affordable prices, and record low interest rates. 

Perhaps Springfield will buck the national trends again. Recent closings have brought the median sale price down by 1.72% but that is a far cry from the nations 10% decline.

On a side note a couple bits of information I learned this week. Since the height of the market in 2005 The National Association of Realtors has lost 400,000 agents, in Springfield a couple hundred.

Another interesting piece of information I learned this week that shows the weakness in demand. At the height of the market in 2005 when buyers flooded the market, because literally anyone who could fog a mirror could get a mortgage, 18% of title transfers in America were for sale by owners. In 2010 the number of for sale by owner title transfers shrank to 4%.

Hope springs eternal. We are either going to maintain the momentum of the past several weeks heading into summer and see a return to more normal levels of sales, or we’re not. At the current pace listings are going under contract June has the momentum to best the five year average for home listings going under contract. After the past couple years, normal will be more than welcome in the Springfield housing market.

Stay tuned here to be the first to know. This is your resource for the most current and accurate information regarding the Springfield housing market.

Make this a great week from Fritz and Kristie Pfister of The Pfister Success Team Inc. at RE/MAX Professionals of Springfield. If you want to sell your home give us a call at 217-652-7653, we have openings for new listings to replace the ones we closed out this week.

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

The week before Christmas the Capital Area Association of Realtors will announce to you that the number of home sales in November increased dramatically over November of 2008. This will mark the sixth consecutive month over month increase in the number of home sales following a dismal first five months of 2009. Then in January CAAR [...]

The government granted a reprieve to first time home buyers by extending the up to $8,000 tax credit until April 30, 2010. This will lead to more home sales, and the increased demand will support home prices.
The tax credit was expanded to include families that have owned their home five consecutive years within the preceding [...]