Weekly Observation for April 10, 2010…. Enjoy the Good Market While You Can
April 10th, 2010The 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.
Same is true for the first quarter of 2010 up by only 44 home sales over the slowest first quarter since 2001. Headed in the right direction or are we? The median sale price in March was down 11.02% and down 2.85% in the first quarter.
The number of home listings skyrocketed in March up by 46.7% and 17.7% in the first quarter. The 1646 homes listed for sale by Realtors today stands only 45 fewer than last year on this date or only 2.7% fewer. The advantage is shifting back to home buyers.
The good news is that the procrastinators of the Springfield housing market have woke up from their winter slumber as witnessed by the hoard of new listings, and by the surge in home listings going under contract up by 29% over last year at this time. April and May look to be closing in on record months.
Let’s put all this in proper perspective. The first five months of 2009 were awful, down over 10% from an awful 2008. Then the interest rates fell and tax credits became available causing the market to take off which will result in twelve consecutive months of year over year gains. That will probably be the end of it.
But what happens next? There’s less than three weeks for buyers to qualify for the tax credit. As I have warned everyone all year interest rates would start going up following the end of the Fed bond buy down program on March 31.
Two interesting headlines in Thursday’s Business section of the SJR; National debt hits the wall, and Record-low mortgage rates over. Locally mortgage rates are up a half percent from three weeks ago. According to the article this will spur buyers to jump into the market before rates go much higher.
My prediction that we would see a slowdown in the number of home listings going under contract beginning in May probably will come true. Demand is being robbed from May as people buy before tax credits expire April 30th, interest rates are going up, and the lack of job creation not adding buyers to the market will all take their toll on sales in May.
Folks I hate to say this, but the economic outlook isn’t good. There have been a few positive signs, however nothing of major import. The stimulus is a bust, the state is busted, and all the taxes and regulations coming down from the Obama administration harm the private sector. The prospects for a rebound are not good as long as there’s no job creation.
From the Bureau of Labor Statistics this past week:
In the week ending April 3, the advance figure for seasonally adjusted initial claims was 460,000, an increase of 18,000 from the previous week’s revised figure of 442,000. The 4-week moving average was 450,250, an increase of 2,250 from the previous week’s revised average of 448,000.
The main stream media basically ignored this story, however did mention that the experts were surprised as they expected the first time claims to fall by 15,000 last week. Businesses have been hit hard by the Obama agenda. Fortune 500 companies had to take a $14.5 billion loss in the first quarter resulting from the passage of Obamacare.
Small businesses remain on guard because Obama now is focusing on Cap and Trade legislation that will increase the cost of all energy for not only every business, but for every family. Higher business costs combined with the government draining families disposable income doesn’t add up to job growth, it adds up to more job losses.
Uncertainty continues to rule until the economic impact of the Obama agenda is known to these businesses. The one thing they do know is the Bush tax cuts will expire at the end of the year which will add 3.9% to the tax burden of small business owners, and beginning in 2011 3.8% for Medicare taxes on all income, passive and active.
That large sucking sound as Ross Perot coined, is the revenue being shifted from the private sector to fund the largest expansion of government in history. Obama is making FDR look like a piker.
Entitlements are being expanded exponentially by the Obama administration and the Pelosi, Reid commandeered congress. At a time Social Security and Medicare have $106 trillion in unfunded liabilities. This is simply unsustainable without massive tax increases. Which would drive the prospects for a recovery over the cliff.
Charles Krauthammer’s article; VAT: Fuel For The Full-Entitlement State spells out clearly how the Obama administration has created the need for this massive tax increase which the socialist European countries use to fund their nanny state entitlements. You can find Krauthammer’s article at investor’s.com which was published on March 26, 2010.
The bottom line is the housing market and any economic recovery will be all about jobs. The Obama economic policies are a disaster, except for creating jobs in the government. For every dollar the government sucks out of the private sector to fund their payrolls, operations, and entitlements is one less dollar for the private sector to use for R & D, pay raises, or hiring new employees.
If you happen to be waiting for private sector jobs to be created, now 14 months following implementation of the stimulus plan, you might as well be standing on the dock waiting for the Titanic to arrive.
We have the most dynamic economy in the world, however the progressive economic policies of Obama place the economy at risk. If this economy recovers it will be done by small business as every time in our history. This time small businesses will have to lift up the economy while the government is standing on their backs. If this economy recovers it will be in spite of the government not because of government.
The bottom line this week is that if you want to buy or sell a home, you better do it now and enjoy the good market while you can.
On a side note. This week following my speech at the Tea Party on April 5th, I have come under attack being called a hypocrite for cashing in on increased home sales due to the tax credits. Do you know how silly a statement that is? For the record you can search my blogs criticizing Bush’s spending, my opposition to TARP, and to the Stimulus which included the tax credits. That’s like saying any Doctor that was opposed to Obamacare shouldn’t treat patients, or any construction worker that opposed the Stimulus shouldn’t work on infrastructure projects or they are hypocrites.
Just proves again that when a liberal can’t compete with the facts they resort to personal attacks. The one thing for sure is that I have proven I can sell homes regardless the market conditions, regardless the government intervention into the market, with tax credits or without, or in a good economy or bad.
Make this a great week from Fritz and Kristie Pfister and The Pfister Success Team Inc. of RE/MAX Professionals of Springfield. Call us 652-7653, it would be an honor to serve your family.
The opinions expressed here are solely those of Fritz Pfister, or identified sources, and not those of RE/MAX Professionals Springfield, or RE/MAX International.
