Fritz Pfister

Happy New Year! Last week I made my fearless predictions for the Springfield Illinois housing market for 2009. Today we will look at the preliminary year end sales figures for 2008. Member brokers of the Capital Area Association of Realtors have through next Wednesday to report year end activity, that is, without facing fines. Since most brokers don’t like paying fines we’ll probably be able to report the final 2008 housing statistics for 2008 next Saturday. Something you won’t hear from the media for 3 to 4 weeks from now.

Let’s begin with December 2008 compared to December 2007. Closed home sales were down by 42 (-18.5%) to 184 from 226. Sales pending were down only by 18 (-8.3%) to 197 from 215, due to a spurt of activity brought on by the lowest interest rates in 50 years. Here’s a statistic that should make you take notice; the median sale price was down $27,750 (-24.4%) to $85,750 from $113,500 in December of 2007.

You can go to my blog at SpringfieldHome.com to see the quarterly year over year comparisons. Let’s just say 2008 was a down year in the housing market. Closed, and pending sales declined every quarter, and preliminary figures show we finished the year with closed home sales down by 551 (-13.7%) to 3473 from 4024 in 2007. Sales pending fell by 693 (-14.5%) to 4092 from 4785 in 2007.

The median sale price surprisingly increased on declining sales in the first quarter, fell flat in the second quarter up by less than 1%, fell 2% in the third quarter, and fell 6.8% in the fourth quarter. This is a trend that makes sense strictly from an economic view point. It didn’t make any sense that prices could rise when demand was falling and the supply was at record highs throughout the year. Something had to give, and by the second half of 2008, it did. Even with this trend of median sale prices falling two straight quarters, for the year the median sale price was down by only $500 to $104,000. What will home prices do in 2009? We’ll have to wait and see, however I stand by my prediction from last week that home prices will fall 1% to 3% during 2009.

OK, 2008 is behind us and it’s time to get to work in 2009. The area that needs the most work in our housing market is the inventory of homes for sale. We can’t expect prices to stabilize and then rise until the number of homes for sale is reduced to healthy levels. We began the year in 2008 with a record 1604 homes listed for sale. Then was up slightly to 1618 homes listed for sale to begin 2009, and stands at 1660 today.

Walter Molony of The National Association of Realtors said this week; “In order to heal the economy, we need housing to recover, and that entails reducing inventory.” At the end of November 4.2 million homes were for sale representing an 11.2 month supply at current sales pace.

Once again the Springfield housing market is in much better shape than the national market. We begin the year with a 6.08 month supply of homes for sale at the 2008 pace of sales. The lower the price the lower the inventory. In our market homes listed up to $100,000 begins the year with a 5.36 month supply, homes listed $100,000 to $200,000 a 5.82 month supply, and homes listed over $200,000 an 8.9 month supply.

In my opinion a five month supply is healthy, if you fall below that number of homes for sale then it becomes a sellers market. Only homes listed below $50,000 have less than a 5 month supply, at 4.9 months to begin the year. Homes listed over $250,000 have the greatest supply with an over ten month supply of homes for sale. See the market activity report this site to see where your home may fall in the supply side of today’s market.

If you will be selling a home in 2009, you are invited to register for The Free Home Seller Seminar coming January 15, from 6:00 to 9:00 pm, at The Capital Area Association of Realtors building located at 3149 Robbins Road. To put everything in perspective, there were more home listings that did not sell in 2008 than did sell, in fact 3473 of the 7523 available in 2008 sold and closed, that’s 46% that sold, 54% that did not sell.

If there is one thing that gets consumers in trouble when buying or selling a home, it is their belief that they are fully informed. I agree with Mr. Keller founder and CEO of Keller, Williams Realty who said; “Most consumers receive their information from the media, family, or friends. When one believes they are fully informed, when in fact they are only half informed, or misinformed, that usually leads to poorly formed decisions.”

The Home Seller Seminar promises to provide you with the information to make informed decisions. Seating is limited to the first fifty registrants. Call 217-652-7653 today to reserve your place at Springfield’s only home seller seminar.

Make it a Great week from Fritz and Kristie Pfister and The Pfister Success Team of RE/MAX Professionals of Springfield.

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