Fritz Pfister

There are a few rays of light beginning to shine into the woods of our housing market. The Illinois Department of Employment Security reported the third monthly decrease in the unemployment rate falling in June to 10.4%, compared to the national rate of 9.5%. Makes you wonder if these rates are going down because of jobs being created, or people giving up and no longer are being counted.

Regardless a step in the right direction, because as I have redundantly stated the past year or more, jobs are the key to home sales. We knew that sales would slow following the expiration of the tax credits. Home listings going under contract took a little bump this week with 71 the best in four weeks. Last year we were averaging around 110 a week.

Comparing the first half of July 2010 to 2009 sales pending are down 33.77%, following declines of 32.95% in May, and 33.71% in June. As a result closed sales so far in July are down 28.85% to 106 from 149 last July. It appears we are locked in a solid trend for home sales running at about two thirds the pace of last year.

Thursday another ray of light came from the Bureau of Labor Statistics: In the week ending July 10, the advance figure for seasonally adjusted initial claims was 429,000, a decrease of 29,000 from the previous week’s revised figure of 458,000. The 4-week moving average was 455,250, a decrease of 11,750 from the previous week’s revised average of 467,000. Headed in the right direction, however not nearly low enough to indicate any credible job creation.

Then some clouds started rolling in, REALTY TRAC reported over a half million homes were foreclosed the first half of the year and are on track to eclipse one million for the first time by year’s end. From the Los Angeles Times: As we’ve been saying since earlier this year, the foreclosure crisis is not over, it is just getting started in earnest – and it’s the numbers that prove it.

Rhetoric doesn’t do much when the records keep getting broken, and the homes keep going to the auction block. No matter how you spin it, this is the reality…

U.S. home foreclosures reach record high in second quarter

Bank repossessions increased 38% in the second quarter from the same period a year earlier for a record total of 269,952, according to data to be released Thursday by RealtyTrac. End Times article.

Thirty one percent of home sales the first quarter were foreclosures, it’s hard to say the percentage in the second quarter. We have above normal foreclosure activity locally, however it pales in comparison to the rest of the nation. A silver lining.

Then Friday some clouds blocked these rays of light. From the Chicago Tribune.com: The Thomson Reuters/University of Michigan consumer sentiment numbers showed increasing pessimism about the next twelve months. Only 39% think their incomes will rise over the next year—the weakest expectations ever measured. Three in four (that would be 75% my words), aren’t expecting unemployment to improve the next twelve months.

As predicted here, that means job creation will be flat to down. If that’s the case, so will home sales. Where else will the buyers come from to replenish the record demand generated by the tax credits that was satisfied in March and April? I opposed the tax credits for this very reason, it simply had consumers change their buying habits which robbed demand for homes that we normally would have had this time of year. Great for the buyers that purchased a home and who are cashing in on the free taxpayer money, but not so good for home sellers today and going forward.

The bright side of the equation is that it sure looks like the conditions are making this the best time I’ve ever seen to buy a home; affordable prices, record low interest rates, a good inventory of homes to choose from, and fewer buyers to compete against. If you’ve got a job, and good credit what are you waiting for?

There’s always a silver lining if you just look for it.

Make this a great week from Fritz and Kristie Pfister and The Pfister Success Team Inc. at RE/MAX Professionals Springfield. If you are thinking of selling your home give us a call at 652-7653, we have openings for new listings as we continue to have success for many of our clients. It would be an honor to serve you.

A point of clarification for those who have heard my ad stating that I have helped hundreds of families buy or sell homes. A fellow RE/MAX agent asked me this week if I hadn’t sold thousands. In fact I have had the honor to close over 2100 real estate sales. The ad folks here at WMAY said hundreds would get the point across.

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 preliminary numbers for home sales in March as reported by member brokers of the Capital Area Association of Realtors MLS changed by only one following the reporting deadline. The 308 closed home sales were up by only 21or by 6.5% over last March. With historically unprecedented low interest rates combined with tax credits, this is a disappointing increase.
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