Weekly Observation for February 5, 2011 Housing Market Report for Springfield Illinois
February 5th, 2011Member brokers of the Capital Area Association of Realtors have through Monday to report January sales, therefore the following report on the Springfield housing market may change slightly if at all. Only one additional sale was reported this week for January as an example. The following are the reported numbers for January 2011 compared to January 2010.
Good news, closed home sales of 179 were up from 167 or by 7.19%, and were the most in four years. Sales pending, those going under contract however were disappointing. The 243 sales pending were down from 260 or by 6.54%, the second fewest in the preceding ten years.
Good news for home sellers on the inventory of homes for sale. The 319 new listings were down from 356 or by 10.39%. The 1383 homes listed for sale today are down 5.3% from last year on this date. The median sale price of $114, 900 was up from $110,000 or by 4.78%. This means there are fewer homes to compete against for a dwindling number of home buyers with prices stable to rising slightly.
What does the local housing market look like going forward into 2011, and what are the major market influences to watch? Jobs are the key to the recovery, and the number of home sales both locally and nationally.
On the national front the news was good this week for first time initial unemployment claims of 415,000 down 42,000 from last weeks adjusted figure of 457,000. The Bureau of Labor Statistics also reported that January unemployment fell from 9.4% to 9.0%. Good news however somewhat misleading, only a total net increase of 36,000 new jobs were reported.
How can the unemployment rate fall by .4% with these few jobs being created? Simple, 1,000,000 people fell off the rolls because they gave up looking for jobs during January. The real unemployment rate when including those who have given up or are working part time because their hours were cut, or who couldn’t find full time employment stands at over 16%. That’s 78% more than the reported 9% unemployment rate.
On the local level reported in today’s SJR from the Chamber of Commerce, Eric Bloxdorf repeated the challenges for 2011; state finances in spite of recently passed tax increases, and federal regulations especially health care reform.
Health care reform is in a terrible mess since Florida Federal Circuit Judge Vinson ruled the law unconstitutional voiding the entire law. There are now eight states who have ceased implementation of the law while others go forward. Nobody knows how to proceed because the Obama administration has not asked for a stay or appeal of the ruling. The constitutionality will ultimately be decided by the Supreme Court but as of today it is declared unconstitutional according to some legal experts.
The uncertainty whether this law will be voided, and the still unknown costs for businesses if implemented will impede job creation. The one thing we do know is that is was unaffordable for 773 businesses and unions who have been granted waivers from complying with the Obamacare mandates impacting over two million workers who would have lost their health care without the waivers.
I will add to the Chambers list of challenges. The greatest threat to our recovery and job creation is the price of gas and food. The risks for rapidly rising prices increased this week with the threat of interruption of oil supplies from the Mideast due to the uprising in Egypt. When President Obama took office the price of oil was $32 a barrel, the price finished Friday just under $90 a barrel.
The reason for the increased oil prices are twofold, worldwide demand as China and India economies grow, and Obama energy policy reducing the domestic supply of oil by placing drilling moratoriums on 95% of American waters, and over seven million acres of land, which the retired CEO of Shell Corporation said if removed would create 350,000 to 400,000 new high paying jobs and add up to 500,000 barrels of oil a day to the domestic supply.
There is little hope the Obama administration beholden to environmental groups will lift the moratoriums placing a disputed hypothesis above the well being of people without jobs, and increasingly unaffordable gas and food prices that will harm poor and middle class families the most. This also risks another pull back in consumer spending like the one in 2008 that sparked the financial meltdown.
President Obama after failing to get Cap n Trade passed by the people’s representatives in congress has ordered new regulations be implemented by executive order through the unelected bureaucrats at EPA. Congress has responded with proposed legislation that would prohibit EPA from imposing jobs killing rules regarding CO2. President Obama responded that he would veto such a law, again proving his allegiance to environmental special interests over the welfare of the poor and middle class families that will see their heating and cooling expenses increase along with gas and food.
To add insult to injury, just as with supporters of Obamacare receiving waivers from having to comply with the new health care law, it was reported on investors.com the following, quote:
It’s good to have friends in high places. Last month, the White House issued tough new rules on CO2 emissions. This month, its biggest corporate supporter wins an exemption. Something smells here.
This has become a pattern for this administration: Impose costly new regulations on the economy, then let some corporations and unions avoid them.
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.
