Fritz Pfister

Are you having a nice winter this fall? Sure felt like it at the Chatham homecoming game last night. In the world of real estate the question should be; are you having a nice spring this fall? It appears we are having a backwards year for home sales, and thank goodness!

Spring is usually the busiest time of year in the local housing market. Not so in 2009. There were more homes listed and more homes sold in the third quarter than the second quarter of this year. We don’t even want to talk about the first quarter.

It has been reported that the number of home listings under contract were way up, however the number of closed sales didn’t reflect that increase. How could so many homes go under contract and not close?  

The primary challenges this year are the tougher lending guidelines, and appraisals. Folks if your home doesn’t appraise for what you agreed to sell it to the buyer for, guess what? You either have to sell at the lower appraised value or don’t sell, in most situations.

In my opinion this is good news. It was the collapse of the housing market that triggered the financial meltdown of the past year. We really don’t have lenders getting tougher on their lending guidelines we returned to what those guidelines were before the meltdown. 

Rules and regulations that were changed by government for Fannie Mae, Freddie Mac, and HUD to make more loans to low income borrowers. The correction on prices are hurting primarily sellers who paid too much when they purchased the home, or over-improved the home beyond the neighborhood values. The days of appraising high are over.

Local Realtors were much more successful in getting homes to the closing table in September, with a 14% increase, to 364 closed home sales. Great news for prospective home sellers. The market heated up this summer and remains hot. Folks with their homes listed however shouldn’t be euphoric about this news, because Realtors listed 14% more homes this September (506) than last year, and we are heading into winter. You know how families love to move in the winter!

Selling real estate can be a challenging business. To be successful one must always be planning ahead. Nothing happens overnight. There may be days and weeks of preparation to getting a home listed, then it may take months to receive an offer, then weeks more to close the sale, if it closes.

There are always factors beyond your control that makes planning a challenge. Following  a dismal first five months to start the year, who could have predicted four straight months of great sales activity (relatively speaking)? It looks as if October will make it five months in a row.

What caused this activity? Record low interest rates, affordable home prices, and a tax incentive for first time home buyers. I can give you about ($)8,000 reasons for first time buyers to be happy, however it all ends on November 30th. If you haven’t closed on the purchase by then, I can give you up to ($)8,000 reasons why you’ll be sad on December 1.

Even if you find a home and negotiate a contract within the next 21 days, you only have a 50/50 chance you’ll close in time to qualify for the tax credit. My advice, buy a home anyway, but don’t count on the tax credit. You’ll still be darned lucky to buy a home at these low interest rates, and prices. Of course you can always wait, so you can make a higher house payment, or miss out on buying a home altogether!

Congress is making noise as if they will extend the credit. Do you trust anything that congress does, or say they will do? Some are saying to renew the program, others say it is too costly, and the latest great idea is to extend the credit but limit it to Veterans. Hey, I’m a Veteran and we’ll take it, however if you want to stimulate the housing market, we’ll need more than just Veterans!

My greatest concern is that while congress dallies around trying to decide what to do, the tax credit expires, and we head into winter with a cash for clunkers hangover. Car dealers were jumping for joy in August, the main stream media was giddy reporting the success of the $4,500 taxpayer gift to car buyers, retail sales were up due to car sales, the end of the worst car market in decades was over!

Was it? No. September car sales fell over 40%. Many people bought before they planned to. That didn’t leave many car buyers in September. Will the same thing happen in the housing market? We’ll have to wait and see, however the one thing I know for sure is; if housing suffers a cash for clunkers hangover, it’s going to be a long, long, long winter for home sellers, Realtors, bankers, appraisers, inspectors, you name it!

In hind sight we would have probably been better off without the tax credit. Government intervention created a false market. Great for the home buyers and sellers during the time of the program, but guess what? We all have to pay back the $15 billion in government generosity for the lucky ones, just as we have to pay back the $3 billion for the lucky car buyers sporting around in their new rides.

Oh well not to worry, we can celebrate in the joy of the best September for home sellers since 2004. That’s right, September 2009 was better than ‘05, ‘06, ‘07, or ‘08. Jeez, I wonder if tax cuts work? Jeez I wonder if the government shouldn’t just cut everyone’s taxes, so you have more money to spend on what you want, rather than create a cockamamie stimulus plan that spends your money for you? Just a thought.

Looking ahead to next year we need some questions answered so we can all be prepared. If anyone knows the answers to these questions please call me at 652-7653, that’s area code 217 if you live outside the area.

Read carefully please. See if you can help by answering these questions.

What will interest rates do? Will they rise, fall, or remain steady? Will the value of the dollar continue to crumble or will it recover? Will inflation remain low or spiral upward? What about the jobs market? Will unemployment rise or fall? Will there be jobs created locally? Will there be tax increases or tax decreases? (Local, state and federal please.) What will the price of gas be? Up or down? How about the price of food, utilities, insurance, and health care while you’re at it? Will consumer’s disposable income increase or decrease? What about consumer spending? Up or down? What about consumer confidence? Rise or fall?

Please contact me with the answers to these questions as soon as possible. It would be nice for everyone to know what’s coming!

Make this a great week from Fritz and Kristie Pfister and the Pfister Success Team at RE/MAX Professionals of Springfield. Call us at 652-7653. It would be an honor to serve you. We just might be the right answer for you!