Fritz Pfister

On December 26 I made my predictions for the housing market for 2010 in my weekly observations. I predicted the year would start slowly, and activity would increase as we approached the tax credit deadline on April 30th requiring buyers to have a contract to purchase in force. That the first half of the year would have the most home sales. That there would be a slowdown in activity after April 30 due to home buyers moving up their schedules to qualify for the free taxpayer money.

So far the prediction is spot on. Last week I reported that January and February sales were the second slowest since 2001, beating only last year, and by only 25 home sales. Well, now it has begun; the dash to April 30th. Put on your track shoes.  Activity has increased significantly in March.

Last week I reported that the lack of job creation and the depressed consumer confidence rating of 46 were the reasons to the slow start to the year. That is true, however there is another reason. The inventory of homes for sale, specifically desirable homes in good condition that are priced fairly.

It was good news we started the year with the fewest listings since 2005. Then it dawned upon me, the 1338 listings that carried over from 2009, for the most part were shop worn listings. Many were not selling because of the condition of the home, and many because they were priced too high. Why? Because the sellers purchased their homes at the height of the sellers market, paid too much, and are now upside down in their homes. More than twenty five percent of home owners in the U.S. owe more on their homes than they’re worth.

There’s another factor that will determine the success of the housing market this year included in my December 26th predictions; interest rates. All eyes are on the bond market when the Federal Reserve ends their bond buy down program. Rates will go up, those eyes are looking to see by how much, and if there are any takers. With the economy on shaky ground as reported here last week, who will buy the U.S.A.’s debt? Regardless, rates are low, at least for now.

Through January and February the number of home listings entering the market averaged about 95 a week. Welcome to March averaging 140 a week . Many of these listings are selling quickly, and many with multiple offers. Buyers are being selective and waiting for the best homes. This should give home sellers that think it may be too late to get in on the dash to April 30th a reason for hope.

This is opportunity time if you want to sell your home this year. If my predictions continue to prove correct, demand will fall after April 30th, and it will be a much greater challenge to sell throughout the remainder of the year. May and June closing will look good, however many will be from homes that went under contract by April 30th. The lack of job growth, and continued weakness in consumer confidence will be a drag on demand for the remainder of the year.

For those home owners that want to sell the clock is ticking, however you still must do it right or you won’t sell. As important as the short time until the tax credits expire, don’t make the mistake of rushing to the market before the home is ready. The best buyers are waiting for new listings, and if you dont have the best condition you’ll lose these buyers and your opportunity. Not to mention it always costs you in sales price if you end up on the market for an extended period of time. Time is the enemy of the home seller.

To date my predictions have been right. I hope I’m wrong about weaker demand following April 30th. The saving grace is that May and June are perennially strong months for home sales. The impact of a slow down may not be as pronounced in May and June. I don’t have the same inclination after that.

It will be all about jobs. The most important home buyer in any real estate market is the first time home buyer. The slowdown we experienced December through February was a direct result of the first, first time home buyer program. The extended program will have the same impact. There won’t be many first time buyers left after April 30th, and the bleak jobs picture won’t be adding many this year.

Last week in my Sunday blog evidence was provided that businesses are ready to begin hiring but won’t do so until the Health Care bill, and Cap and Trade bill are resolved. Five industry leaders testified to this fact. The costs of both programs are holding down job creation.

Health Care appears soon to be resolved. President Obama and congressional Democrats continue to press forward with the health care bill in spite of overwhelming evidence the American people don’t want what is being proposed. The entire process has been corrupt, and got even more corrupt this week as the House of Representatives is considering to violate the law by not voting on the Senate Bill as required, but voting on a rule as if the house had voted and passed the Senate bill. Why? Because they don’t have the votes to to pass the Senate bill.

The bill is flawed, the process corrupt. If it was such good legislation and had the support of the American people it would already have been passed. It appears by hook or crook the Democrats will force this bill into law. Enactment will have three areas of negative impact upon the economy.

First, passage of this flawed bill will outrage the majority of Americans driving their confidence in government down along with consumer confidence. Secondly, the taxes that will go into effect immediately will provide businesses with certainty as to costs, however mandated insurance purchases, fines, and taxes will suck the money away from hiring, exacerbating the high unemployment problem. Finally it will leave consumers with less disposable income, that will lower consumer spending, adding to the vicious cycle.

Once the Health Care bill is settled the president announced he wants the Senate to immediately act upon Cap and Trade legislation. In today’s SJR there’s an article with John Kerry claiming the energy bill is about jobs. It sure is, it will eliminate jobs. As president Obama said on numerous occassions during the campaign, just look to what Spain has done with their green energy policy.

Ok let’s look at Spain, unemployment is up to 20%, because as a study by Spanish economics professors concluded, for every green job created 2.2 other jobs were lost, and the green jobs proved to be only temporary. Spain is following in Greece’s footsteps as next to be on the verge of financial collapse. All reasons not to follow their green jobs policy.

If the health care bill and cap and trade pass, the jobs situation will become grave with a high probability our economy entering a double dip recession. If that happens then my predictions for the second half of 2010 for home sales to be weak, may become an understatement.

This is a sad state of affairs. Businesses are ready to hire and begin putting the 17 million Americans without jobs back to work, but are holding back due to the Obama transformative social economic remaking of America.

Here’s the bottom line for home sellers in the Springfield area. Today through April 30th will probably be the best it will get this year in the housing market. If the federal government continues to attack the private sector with onerous regulations, and taxation, a jobless recovery will be the best you can expect.

Put your track shoes on if you want to buy or sell a home. You home buyers better be first to see these good new listings, and first to write an offer or you will miss out. I am working with a couple, who previously were shopping on their own, then with the help of an agent with which they became displeased. They wrote offers on four homes and lost out to other buyers every time. Now with their home sold they will have to rent, because the clock ran out on them.

Whether buying or selling don’t let the clock run out on you. Hire an agent who knows what they are doing to advise you on how to proceed so you can succeed. The clock is definitely running out on tax credits, and record low interest rates. Will you be able to take advantage of this opportunity? Hire the right agent and you can.

Make this a great week from Fritz and Kristie Pfister and The Pfister Success Team, Inc. of RE/MAX Professionals Springfield. Sign up today at SpringfieldHome.com for the free home sellers seminar this Thursday, 6:00 pm at The Hilton Garden Inn on Dirksen Parkway. Give yourself the edge over the competition. Or call us at 652-7653 we have immediate openings for home listings, numerous preapproved buyers ready to buy, and the experience to do the job right.

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.