Fritz Pfister

For the second year in a row my family spent the past weekend in St. Charles attending a dance competition for my daughter. The event was held at the Pheasant Run Resort. What a difference a year makes. Met two staff members of the resort, one was an appraiser last year, and the other a Realtor. If that gives you any indication of the real estate market up north.

Once again we should take the time to be thankful we live in Springfield, where the market gyrations are never as severe as large markets. Sure we have experienced a slow down in sales, however nothing like other markets.

The local housing market has come alive since Valentines Day, which typically marks the beginning of the spring selling season. In 2008 sales fell by 13.3% to 3488 down from over 4000. January and February continued the downward trend, however we are experiencing a rebound in March.

How long will the uptick in sales continue? My prediction is at least through May and possibly into June, after that we will have to wait and see. The performance of the housing market is dependent upon numerous factors, but none more than jobs. How will the local economy fare during this recession, and how many jobs can be retained or created will determine the number of buyers in the market.

There has never been a better time to be a home buyer in our market. The Federal Reserve announced last week the injection of over a trillion dollars into the treasury market which drove mortgage interest rates even lower. From an interest rate perspective it doesn’t get much better.

The problem is this infusion of new money drives down the value of the dollar as we witnessed the price of oil, gas, and commodities jump in response. Interest rates may be great, however if the cost of living goes up to fill the gas tank, and stock the groceries, it will cause futher erosion in consumer confidence. If daily necessities continue to become more expensive, the luster of lower rates loses its shine.

What actions the state will take toward the governor’s budget proposal drastically increasing personal and corporate tax rates also has an impact upon consumer confidence. Will we have less money to purchase the higher cost of dailey necesseties is a question asked in many households.

At a time when upper income earners are facing an outright attack from the federal government upon their earnings, along comes the state to pile on. Facing higher taxes from both state and federal governments, combined with the loss of deductions, the top earners won’t be seen in large numbers in the real estate market. Places like the Chicago area will certainly get hurt worse than Springfield due to real estate values, however Springfield will be impacted.

Looking at sales activity in our market for homes that are listed at $250,000 and higher shows the challenges these home sellers face. Through March 20, 39 have sold and closed, 28 are under contract while 258 remain listed for sale.

The higher the price the tougher the competition, homes listed $300,000 and up have 154 homes listed for sale while 21 have sold and closed, and 13 are under contract. It would take well over a year at the current rate of sales for these homes to sell, if not one more home were listed at this price until spring 2010. Take a look at the Market Activity Report on this site to view activity in all price ranges.

Don’t miss your opportunity to get sold, and the way the economy is shaping up, now through June may be the best time to sell this year. The impact of rising prices, the threat of inflation, declining jobs, and tax increases are headed our way, get moving before they arrive!

The opinions expressed are solely those of Fritz Pfister, and not RE/MAX Professionals of Springfield or RE/MAX International.