Fritz Pfister

Having returned from a family vacation over the New Year holiday (boy is it fun flying now!), wanted to wish you a Happy New Year.

Some things never change as we enter 2010. On New Year’s day I attempted to update the Market Activity Report on my website. Even after consulting with my web master the technology failed me from out of state. Technology is a wonderful thing, when it works. The update is now complete showing the market activity as it was reported on January 1, 2010.

There was good news, bad news to be derived from the day 1, 2010 housing statistics as reported by member brokers of the Capital Area Association of Realtors MLS. The good news is we started the year with only 1338 home listings available for sale. The fewest since 2004.

The bad news is that we started the year with 1338 homes listed for sale. That’s because nearly 200 family’s home listings expired without selling at year’s end. Will they be back to try again? Most will if history repeats itself!

Well it seems my first prediction for the market in 2010 was off a bit, having predicted we would start the year with 1400 to 1450 homes listed for sale. Wish someone would have told me we would have the largest number of home listings expiring to end a year this decade. That’s the trouble with the predictions business, there’s always going to be unanticipated events.

It appears local Realtors will post a gain of about 7% in the number of home sales in 2009 over 2008. The median sale price will finish up over 5% at around $109,000, a new record high for our market.

This is good news heading into the new year, 2009 was up. Then in today’s SJR Business section the headlines read; National interest in buying homes falls. Seems homes going under contract fell 16% from October to November. The reason? Buyers rushing to beat the deadline for the tax credit.

Here in Springfield home listings going under contract tallied 354 in October, and 214 in November. That’s down 140 or by 39.5%. Don’t get too excited one way or the other about comparing October to November locally. We always see a seasonal slowdown this time of year.

What is more important is the year over year comparisons. October 2009 was up 28.72% over a terrible 2008, November 2009 was down slightly by 2.72% from a terrible 2008, and December is down 3.77% from a terrible 2008. Thanks to a burst in sales the last week of the year December rallied to be down by only 3.77%, sales were down over 12% at Christmas.

This does concern me to a degree. The number of home listings going under contract being down two months in a row compared to 2008 when the nation was in shock from the financial meltdown. That doesn’t indicate an overwhelming demand for homes.

What does this tell us about the current demand for homes? As stated in today’s article the tax credit spurred sales, and in spite of the extension of the tax credit, prospective buyers apparently are taking their time. That may be the wrong assessment. The question should be; what buyers?

I predicted here that the first tax credit would lead to weaker demand following expiration. It has. My prediction is the same for the extended and expanded tax credit. When April 30 arrives, whatever demand there is for homes will be depleted by people rushing to take advantage of the tax credit before April 30.

Demand will all boil down to jobs. Where will demand come from if there isn’t job growth? Will we just end up trading spaces? There is always demand in any market due to death, divorce, out/under grew the home, transfer, and financial gain, or hardship. That appears to be the basis for demand in 2010.

In another article, while catching up on the news while out of town, a survey of local employers indicates employment to remain the same through March. Wonder what happens after March? That will be the key heading into the spring market.

Spring sounds pretty good as we are in the deep freeze to start the year. Have you ever heard John Prine sing; Spring is just a smile away, laughing at a summer’s day, turn around and look at fall, winter hear my lonely call?

So…Happy New Year, and thanks John for reminding us that spring is just a smile away!

Tune in Saturday at 10:00am on AM970 WMAY for Let’s Talk Real Estate where you can hear the final numbers for 2009. We also have Congressman John Shimkus scheduled to call in at 11:00am. It will be interesting to hear the latest from D.C.

If you are considering selling in 2010, and want to take advantage of the $6,500 tax credit for repeat home buyers, call us at 391-1811 to reserve a seat at the free home seller seminar Thursday January 21 beginning at 6:00pm at The Hilton Garden Inn on Dirksen Parkway. April 30 will be here before you know it.

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.