Fritz Pfister

The final numbers are in for January 2010. The official report will be released  toward the end of the month by The Capital Area Association of Realtors. Last week I predicted closed sales would be up by as much as 15% over last January. Well that prediction was wrong. Here are the numbers for the Springfield Illinois housing market for January 2010 compared to January 2009.

Closed home sales of 167 were up 3.08% from 162. The median sale price of $104,500 was up 13.03% from $92,450. New listings of 353 were down 9.25% from 389. Average days on the market of 92 were down 4.17% from 96. Sales pending of 200 were down 27% from 274.

The reason my prediction for closed sales was off for January was due to estimating 20 to 25 closed sales would be reported this week from end of month closings. There were only 7 reported from the 585 agents with member brokers in the MIS.

The number that stands out in January is the homes going under contract at 200 down 27%. It looks as if we are trying to replenish demand following the record fourth quarter. Action did pick up significantly the first week of February, just in time for this winter storm to probably slow us down this weekend.

There was a mixed bag of news regarding the economy this week. Unemployment for January fell to 9.7% in spite of losing another 20,000 jobs. On the surface that doesn’t seem logical. The reason is the large number of people that had their benefits expire and are no longer counted. Regrettably when counting the under employed with those who have quit looking the rate jumps to over 16%.

In a bit of surprising news the Bureau of Labor Statistics announced adjustments to the number of unemployed in 2009. They only missed the mark by 1.2 million. The number of people who have lost their jobs since the beginning of the recession in December of 2007 is now estimated at 8.4 million instead of 7.2 million. That’s quite an adjustment, wonder if anyone loses their job on this one? I’m sure they would in the private sector.

In other news President Obama released his 2010 budget proposal. Here are a few highlights as reported by Heritage Foundation Fellow Brian Riedl; 1. Permanently expand the federal government by nearly 3% of GDP over 2007 pre-recession levels; 2. Raises taxes on all Americans by more than $2 trillion over the next decade (counting health care reform & cap and trade); 3. Raises taxes for 3.2 million small businesses and upper income taxpayers by an average of $300,000 over the next decade; 4. Leaves permanent deficits that top $1 trillion in as late as 2020 and; 5. Doubles the publicly held national debt to over $18 trillion.

I’m not able to translate what all that means, but it gives me a sick feeling in my stomach. Most people can figure out this is not good for the country, their or their children’s future. Here’s an excerpt from the Heritage Foundation reporting on the budget proposal; QUOTE:

“Representative Paul Ryan tells National Review online: ” This budget presents a choice of two futures…This budget is about more than specific programs or policies. It is really about the American idea, and whether we want to move towards a European-style welfare state.” Or as then California Governor Ronald Reagan put it in a slightly different context over 40 years ago: “This is the issue of this election: Whether we believe in our capacity for self government or whether we abandon the American revolution and confess that a little intellectual elite in a far off capitol can plan our lives for us better than we can plan them ourselves.” END QUOTE.

Personally I think it rather presumptuous of President Obama to include Health Care Reform, and Cap and Trade in a budget when neither has passed into law, and the American people have flatly rejected both in recent polling. Perhaps he misses the meaning of Massachusetts, New Jersey, and Virginia.

Regardless, in my opinion there can be no significant recovery, no meaningful job creation if this budget is passed. You simply cannot burden the job creators in the private sector with onerous taxation, and regulation and expect them to start hiring. Just two reasons why President Obama’s proposals to help small business with loans and tax credits will fail to have the intended impact.

Curtis Dubay Sr. Tax Policy Analyst with the Heritage foundation has posted an in depth analysis at Heritage.org titled; Hiring Tax Credit Will Not Create Long Term Jobs. It is an excellent, and easy read which I recommend. My intuition tells me why the tax credit will fail, Mr. Dubay provides the evidence, and proposed solutions that will create long term jobs.

The state of the housing market, economy, and for that matter the union will be determined by what actions congress takes on this radical budget proposal. If it is passed as requested, the $1.8 trillion debt created combined with last years $1.4 trillion deficit will mean the Obama administration will have imposed more debt upon the American people than was created in all the prior years of our nations existence combined. This is a reckless and dangerous course of action, and should be stopped, or we and our children will suffer the consequences.

For your future well being, and that of the nation, contact your representatives to voice your disapproval. Unless of course you approve of this radical agenda.

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.