Fritz Pfister

The preliminary report by member brokers of The Capital Area Association of Realtors MLS for May 2010 compared to May 2009 are as follows:

Closed home sales of 391 up 21.42% from 322 representing the twelfth consecutive month over month increase. Please note that May of 2009 closed home sales were down 20% from May of 2008. Whether a new May record will be established remains questionable with final sales from Friday 68 closings short of the 459 closed sales in May of 2006.

Sales pending of 298 down 123 or by 29.22% from May of 2009, and down 341 or by 53.36% from the record 639 in April as buyers rushed to qualify for the expiring tax credits. With 480 listings reported sold pending today it appears closed home sales may be up in June over June of 2009.

The median sale price was up 6.27% in the month, and is now up 1.9% for the year to $107,000.

The 344 new listings were down 20.55% from 433 last May, however are up 12.91% for the year with 2413.

What does all this mean for the Springfield housing market and those wanting to sell their homes? It means the market is unfolding as predicted here with a slowdown following the expiration of the tax credits. The saving grace are the record low interest rates. Where the market is headed will be determined by jobs and consumer confidence.

There was some luke warm news reported this week with the consumer confidence index rising to 63.3. Good news that confidence is rising, however 63.3 is paltry since 90 means a solid economy, and 100 means a growing economy. Consumer confidence remains at an F on the 100 scale.

Jobs continue to be a concern. First time claims for unemployment fell to 460,000, down from 471,000 the previous week, however is an indicator of weak job creation. Without significant job creation there is no recovery, only a languishing economy as the GDP was revised down to 3% from 3.2% in the first quarter. Unemployment fell in April to 8.4% in Springfield, but was up from 6.3% in April 2009.

Forecasts for employment in Illinois indicate the potential for modest job growth in the 5,000 to 10,000 range over the next 12 months; over the past 12 months the Illinois economy has shed over 148,000 jobs, according to the U. of I. Economic Applications Laboratory.

With consumer confidence well below 90, and no meaningful job creation, the number of buyers entering the market to purchase a home will be subdued for the remainder of the year.

Due to record low interest rates and the tax credits available through April 30th the first half of the year should post an over 20% gain in home sales over 2009. Unless there is a change in the jobs picture adding buyers to the market, I stand by my prediction that second half home sales will decline and Springfield ends the year down 3% to 4% from 2009.

Only time will tell. Next week the final numbers will be in. Several weeks from now the local media will report the good news about closed sales being up significantly in May. Will they report the significant decline in the number of sales pending, which is an indicator of future closings? We’ll see, however that is why local home sellers depend upon real time activity reports here, and to get the whole story, not just the sunny side of the street story.

Going forward, it is going to become more challenging to sell a home in this typically stable Midwestern housing market. The well informed will have the better chance for success. Tune in next week as we share the final numbers for May and the first five months of this yoyo year.

Make this a great week from Fritz & Kristie Pfister and The Pfister Success Team Inc. at RE/MAX Professionals of Springfield. Leading the market in real estate sales for the 22nd consecutive year. If you have a RE/MAX agent of choice call them, if not call us at 652-7653.

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