Home Sales Springfield IL. 2008

This is a preliminary report for home sales in one of the nations most stable real estate markets for the month of June, second quarter, and first half of 2008. The numbers will change slightly as member brokers of the Capital Area Association of Realtors have through July 3 to report sales for June. Don't expect any significant changes.

The one trend that stands out is the median sale price. On the strength of a 1.1% increase in June to $114,750, the second quarter increased $500 or less than one half percent to $107,500 over 2007. The first half of 2008 median sale price is up $3000 to $105,000 or by 2.9% over 2007. The reason this stands out is this represents a marked slowdown in the rising median sale price. This probably is the result of fewer sales, and record inventory.

Closed home sales for June stand at 360 at time of report or down 21.7%. Anticipate a few more sales to be reported, with a decline of 90 to 95 home sales or a 19 to 20% drop from June 2007.

Closed home sales for the second quarter are down by 164 or by 13.1%. The slowest second quarter this decade. With sales pending off in June don't expect a rebound in closed sales in July.

Closed home sales for the first half of 2008 are down by 322 to 1755 or by 15.5%. Final numbers will probably finish at 1760 to 1765 closed home sales. Following the expiration of 101 listings the past 48 hours, the number of homes listed for sale stands just under 1900. Clearly a greater than 6 month inventory of homes for sale.

Sales pending fell by 80 or by 16.8% in June; by 173 or 11.7% in the second quarter, and by 364 or 13.6% in the first half of the year. With the tougher lending standards, tightening appraisal values, and a home seller's greatest nemesis the home inspection, approximately 20% of sales pending fail to close.

The slow down in the Midwest's best market in 2007 is indicative of the recent pull back in consumer spending resulting from high fuel prices which is causing the price of just about all consumer products to increase. Just ask the auto industry, or Starbucks.

With a complete lack of leadership from the Democrats in the State, and in the U.S. Congress don't expect any price relief at the pump anytime soon. Yesterday the Dem's Harry Reid continues to do nothing to help increase production of oil by standing with the environmentalists by saying oil and coal make us sick. Oil and coal make the economy healthy Senator Reid. Lower fuel prices would bring down food and other consumer prices, and create jobs.

This is 2008 where production and use of these energy sources can be done in an environmentally safe way. Ask any miner that wants a job, a working single mom, or construction worker what their opinion is. Senator Reid would rather starve the miner, his family, and see you pay more at the pump. For Democrats to say they stand for the working man is mere rhetoric, their actions harm the working man. All for personal political gain. Time for Reid to go, or start acting in the best interests of the people.

The people of this country better wake up to the fact that the Democrats will destroy the economy in favor of promoting climate change (a/k/a global warming) for political gain, because they are owned by environmental extremist's lobbies and philosophy. This is nothing more than promoting a Socialist movement to gain control over your lives. It has nothing to do with the environment.

In my opinion the people of America had better kick the Democrats (and any Republican) under the bus that supports extreme actions due to the fallacy of climate change, over the price of gas/food/energy you pay, crippling the economy. Time for a return to common sense, and practical programs that will lower the price of gas/food/energy.

Enough of the liberal feel good environmental political correctness, and put people above political ambition.

News, Home Sales Springfield IL., and the Fourth of July

OK, the news this week continued to dump salt in the wounds. Oil surpassed $140 a barrel on Friday, consumer confidence reported on Wednesday sank to record lows, automobile sales continue to fall, home prices were reported down in every major metropolitan market, the governor announced the relocation of the IDOT Department of Traffic Safety out of Springfield to Harrisburg, AFSCME rallied at the capital to protest the lack of a fair contract, and Blagojevich announced 1.5 billion in cuts to the budget if his nemesis Madigan didn't come back to Springfield and pass his cockamamie bond floating, fund sweeping, lottery leasing, capital plan, and budget that merely mortgages the future once again.

Other than that, how did you enjoy the play Mrs. Lincoln?

As promised last week I will be watching the end of month home sales for June. Expect home sales in the local market to be down double digits in June, in the second quarter, and in the first half of the year.

The inventory of homes for sale remains at record levels for this time of year with 1962 homes available for sale with local Realtors today, not counting for sale by owners, and builders.

Sure doesn't sound like much to be happy about. That is where you would be wrong. Sure we are going through an economic downturn brought on by higher oil prices driving up the cost of just about everything, and we have to deal with a governor who obviously doesn't like Springfield, and a bloated federal government that causes more harm than good.

But this upcoming week we will celebrate the Fourth of July, and the birth of the greatest nation ever known to mankind. Sure our governor is incompetent, but we live in a nation where we have the freedom to say so. Sure the economy has seen better days, but we still have air conditioned homes, refrigerators and pantries stocked, and outdoor grills at the ready to celebrate with family and friends. It may cost us a little more in gas to get wherever we shall travel, however we have the freedom to travel wherever we desire.

Maybe there are record numbers of homes for sale, maybe you're having difficulty selling a home, at least you have a home, live in a country with the freedom to own a home, and a country with the highest level of home ownership in the world. A country where the majority of those considered poor own a car, and a TV set, where grocery stores brim with thousands of products.

You live in the most generous nation in the world as many give freely of their own to help those without, hungry, and suffering from natural disaster. Here and around the world.

Yes we have lots to be happy about, the freedoms that we enjoy, that many take for granted, are being protected this very day by an all volunteer military serving throughout the world. To those serving today, thank you for all you do, for your service, and your sacrifice. Thank you to all the families of those serving who will have an empty seat at the table while a loved one serves away from home this 4th of July.

Yes we have been blessed as no other country in the history of mankind. So this fourth of July, forget the temporary troubles we endure, we are Americans and we will overcome these obstacles and any obstacle that is placed before us, set aside those concerns, and be happy to count the blessings and freedoms you experience every day in this country.

God bless you all, God Bless America, and God Bless those who serve around the world today. Have a Happy Fourth of July!

Selling Your Home In a Bear Market

The recipe for slow growth is firmly in place. Take evaporated disposable income going toward everyday necessities like food and, gas, mixed with a dash of higher unemployment, dysfunctional government, inane energy policy, high taxes, pulled pork (earmarks), and you will get a heaping helping full of wait and see stew.

This is the wealthiest country on earth, and there's plenty of money to be spent. The average family is pulling back out of necessity, the upper middle income folks are sitting tight, and the wealthy wait to see if their earnings will be stolen through confiscation by Obama to pay for more government bureaucratic entitlement failures. These are the primary sources of uncertainty, and the pull back in consumer spending.

If you must sell a home you can take heart, people still need a place to live. There will be homes selling, just not in the numbers most markets are accustomed to seeing. Who will sell, and who won't?

This is Springfield Illinois where the market was spoiled with over 4000 homes being sold annually for the preceding four years. This is a new year which has home sales on pace for about 3400. This is not a crash, more of a return to more normal levels of sales. The challenge is the number of homes for sale, continuing to set records. There are more homes listed for sale today, 1974, than will have sold during the first six months of 2008.

This is called competition of the highest order; fewer buyers, more sellers. The result? Unlike the robust years of the recent past, low offers, short appraisals, stricter financing requirements, longer time on the market, and a lower sale price to list price ratio are the norm. Not to mention foreclosures and short sales.

So how does one successfully sell their home in these bear market conditions? Know the holy grail of home selling; price, condition, and agent selection. These are the deal makers, or deal breakers. Experience is often overrated, however not when selling a home under these conditions. An agent that has experienced buyer markets is infinitely better suited to advise you on the primary components of getting sold; price, and condition.

My advice is to hire the best agent and company in your market. That would be an agent with a proven sales record, with top quality Internet presentation, and marketing materials. Ask to see samples. Trust but verify agent's, and company's claims.

Establish a pricing plan before you list your home. This market is changing faster than a teenage girl's mood. Knowing where you are going with the price at prescribed times while on the market, will increase your chances of selling threefold. How do I know? Since introducing my pricing plan strategy, three times as many of my listings have sold and closed as the average of the top twenty five agents in the market. There are 690 agents.

Have your home inspected, and make repairs before you list your home. Offer a copy of the inspection report to financially approved home buyers that show interest, then sell 'as is'. This eliminates the opportunity for buyers to leverage more money from you following their inspection. Buyer's want their own inspector? No problem, give the buyers first right of refusal to write an offer while they have the home inspected. Seven days should be sufficient. Then negotiate the sale price of your home. Once.

There is a plethora of information available regarding preparing a home for sale. Let me make it easy for you. Everything you do is to create a sense of cleanliness, and spaciousness. If flooring needs replaced, replace it. Walls need painting, paint them. Use the 'I would' rule; if anything causes you to pause and think, 'should I do this?', I would.

Do you have to give your home away in order to sell? No. You just need to be better priced than your competition.

Do you need to make your home like new? No. Just so your home shows better than your competition.

Do you have to hire the best agent/company in the market? No. Just one better than your competitors hired.

It's like the fellow who was slowly reaching for his shoes while camping with a friend when they spotted a bear heading toward their campsite. The man's friend said; you can't out run a bear. The man replied; I don't have to out run the bear, just you.

Springfield, IL. Housing Market Undergoing Slowdown

It appears that the local housing market is slowing down from the activity experienced during the preceding four years when the Capital Area Association of Realtors member brokers posted over 4000 home sales each of those years. The current pace of sales in 2008 would produce around 3400 home sales. A fifteen percent decrease, however not a crash.

There are a number of economic factors causing the slowdown, and will impact future sales. Stagnant to falling job growth is a major contributing factor however there is more.

On April 20 I reported here that at that time the biggest threat to the housing market was barely being mentioned; inflation. Today's (6-14-08) SJR reports the sharpest increase for inflation in the past six months. The time is near for my prediction to come to fruition, the Fed can not stand idly by while inflation soars, and the value of the dollar falls. The Fed will be forced to raise interest rates sooner rather than later to stave off inflation, and to prop up the value of the dollar, which would bring the price of oil down, because oil is traded in dollars.

The Federal government in its infinite wisdom doesn't calculate the cost of energy and food when reporting the rate of inflation. How many of you budgeted at the beginning of the year, anticipating that gas prices would be over $4 a gallon, and planned for a 10% increase in the cost of your groceries? If you did, come see me, I need your soothsayer abilities to help predict home sales.

The crux of the matter is the average household is numb from skyrocketing prices in gas and food. The increases in food costs are directly attributable to the higher fuel prices. Now to add to rising prices comes major flooding in America's breadbasket. The loss of crops will drive food prices even higher.

The stock market is said to be a portend-er of future economic activity, and has built into today's prices of stock foreseeable future events. The same is true for mortgage lenders and investors. Mortgage interest rates have begun to creep upward in anticipation of the Fed raising rates, and to remain financially profitable.

Housing sales continue to be slow across the nation, in other words fewer buyers means fewer loans on which to make a profit, resulting in mortgage lenders increasing the spread between what they pay for money and what they charge to loan the money.

Higher mortgage rates have two important impacts upon any housing market; fewer buyers with weaker purchasing power, which leads to lower home prices.

This year will prove to be as challenging to sell a home as any during the past 14 years. Why? On average only one in seven homes listed for sale will sell in a month.

If you must sell your home, for you to have success, you must have the best condition, best price, and best agent.

You should also be prepared to negotiate more, because the average sale price to list price ratio is 95.7%, the lowest in a decade. During the sellers market the ratio approached 98% of asking price.

You need to be prepared to be on the market longer, the average days on market to contract in 2008 is 87 days, and that's for the current listing period only. Counting previous time on the market the cumulative days to contract exceeds four months, and that's only for those that have sold and closed.

As mentioned earlier, about 3400 homes will sell this year. Your odds of selling during a month are one in seven. However you can get sold if you hire the right agent, and the right company that has the experience and market proven systems that are getting homes sold. This is no time for amateur hour.

If you must sell your home don't dally; higher interest rates, which makes home selling more challenging, is around the corner if not at your doorstep.

If you must sell your home in 2008, you can have success. However there are only two ways you can succeed, do it right, or take your chances and hope to get lucky. Which will you choose?

May Home Sales, Politics, and Policy

Here are the (preliminary) final numbers for May home sales as reported by the broker members of the CAAR MLS. These numbers may change slightly as agents may be tardy on reporting within the required time frame mandated by the MLS.

Good news. Home sales rebounded from a dismal performance in April. The 401 closed home sales in May were off by only 3 from May 2007. Additional good news is the median sale price increased by 2.6% over May of '07.

The not so good news is that pending listings were down by 98, or by 19.7% which means June closings look to be down. The days on market for sold listings from last May were up to 82 days. The number of home listings continue at record pace with 1965available for sale today, not counting homes for sale by owner or by builder.

Through the first five months of 2008 closed home sales are down by 223 or by 13.7%, while sales pending are off by the same 13.7% however by 303 pending listings. Average days on the market are up to 89 days.

Opposite what one would believe with sales down, record numbers of homes for sale, and days on the market taking longer for those selling, the median sale price was up 4.79% the first five months of '08 over '07.

Friday June 6 was not a good day on the economic front. Unemployment rose to 5.5%, the stock market fell 394 points, and the price of oil surged to a record $140 a barrel. The good news is that many experts predict that oil prices are in a bubble that will burst. This is one time I hope the experts are right.

Hopefully the American people will get so infuriated with their congressmen and senators for being the primary cause for oil prices, that they all start a flood of calls to D.C. demanding our government allow drilling of our own oil reserves now, and provide regulatory relief to oil companies that are stuck in the bureaucratic mud of D.C. attempting to build refineries that would increase gasoline production.

Thank God the senate defeated the global warming legislation that would deal a death blow to the economy. The only problem is both presidential candidates support this legislation that would render the largest tax increase on business in history. If you believe prices are high now, you ain't seen nothing yet.

Just as the American people rallied together in protest of the Amnesty legislation for illegal immigrants, we can only hope the people will rally to stop the insane energy policies, and moronic global warming legislative initiatives. Otherwise you can kiss any hope of a good economy, and recovery in the national housing market good bye.

All indications are that Democrats will increase their numbers in the congress and senate, and that they have a good chance to win the presidency. I don't believe the best interests of the country will be served by one party controlling all three branches of government.

Recent history shows that when the Republicans controlled all three branches, spending increased one trillion dollars mushrooming the national debt. This has caused the Republicans a great deal of harm and loss of trust to govern among the public, and rightfully so.

All one has to do is look to Illinois where Democrats control all branches of government to see what a dysfunctional, spend happy, power drunk one party rule can cause.

The threats to the economy in the state are significant with the legislature passing a budget billions of dollars in the red with their vote buying, entitlement growing, spending proposals. I fear the state of Illinois is but a small sample of what would happen when the entitlement promising Obama gets elected, creating grave damage by government to the private sector.

The best hope for the American people would be the failure of Democrats to either win the White House, or gain 60 votes in the senate. The result would be gridlock. When government can't pass legislation, only then will we be safe.

I am asked regularly how long will the housing market be in a slowdown? My answer; as long as we keep electing people that believe in bigger government, higher taxes, more regulation, more entitlements, and pander to environmentalists over the good of the country, which means there's no light at the end of the tunnel.

Tenuous Times in Illinois Housing Markets and Why

There's no question the pace of home sales has slowed from 2007. The Capital Area Association of Realtors member brokers report closed home sales year to date are down 16.6% to 1079 from 1295 last year through May 9. This does not mean the market is crashing. This is the first measurable slowdown in over a decade, however this is not a natural cyclical slowdown, it is the result of governmental policy.

Home listings going under contract are down by 7.6% from a year ago this date to 508. April activity was brisk which means closed home sales in May will show a rebound, although will come in slightly below May of 2007. Sales pending the past week were below 100 for the fourth consecutive week. On only 4 occasions this year did weekly sale pending listings eclipse 100. An unusual occurrence in the Springfield housing market during Spring.

The biggest challenge is the surging inventory of homes for sale which stands at 1850 home listings available for sale today. Another record for this date. It has taken four months and nine days to close 1079, which means there is a 7.37 month inventory of homes for sale.

In my opinion the biggest factors for the slowdown in sales are 1. anemic job growth, 2. the high cost of gas/food/energy, 3. the constant press reports emphasizing the negative 4. the utter lack of confidence in the inept Blagojevich administration, who now proposes moving more state jobs out of Springfield.

Regrettably there are no quick fixes for any of these problems. Jobs and Blagojevich go hand in hand. The state is Springfield's largest employer, and in my opinion Blagojevich is determined to harm our local economy due to our elected officials voting for recall, in order to reward legislator's districts that voted against recall.

The press will not change because if it bleeds it reads. The energy crisis has been brought on over decades due to the governments blocking of nuclear power plant construction, refinery construction, and the blocking of drilling in government owned lands that would increase our supply of oil. Don't expect any fast action by the Federal government. Our elected officials are owned by environmental lobbies who's good intentions are causing more harm than good for the people it was intended to help.

The reality of the situation, Blagojevich in office three more years, special interest groups owning the Federal government, and the negative press will cause our housing market to remain in a slow cycle for the next couple of years. Local home sellers are experiencing the most challenging market in which to get sold, since the high interest rate years of the 1980's.

In spite of all these negative forces working against Illinois home sellers, many will have success. However only if they approach the sale of their home in an educated, business like manner. Price, condition, and agent/broker selection will all become more critical to selling during the next several years.

Home Sales April 2008, Springfiled IL., Blagojevich Impact

Welcome to real time real estate. Preliminary numbers are in for the local housing market for April of 2008. As predicted here, based upon March sold pending contracts, member brokers of the Capital Area Association of Realtors MLS report closed home sales were down from April 2007.

With one business day remaining for brokers to report, the 321 closed home sales are down by 64 or by 16.6% from 385 in April of 2007. Expect those numbers to change slightly when the final numbers are reported. For the first time in months the median sale price slipped by $1000, or by 1.04% to $95,000.

The time it took for a home to get sold in April was up to 89 days from 78 last April. The cumulative days on the market are substantially higher when including time on the market during a previous listing period when there was no sale, to an estimated 148 days on the market.

Through the first four months of 2008 closed home sales are down 224 or by 18.4% to 989, days on the market are up to 92 from 79, and the median sale price is up to $97,000, from $94,900 or by 2.2% compared to January through April 2007.

Last week we shared with you that consumer spending, and job growth would be the reasons for any slow down, or pick up in home sales this year. There was a sliver of good news this week with the unemployment rate falling to 5%, consumer spending up fractionally in March, and first quarter GDP growth of .6%. This means we were close, but no recession.

The not so good news was consumer confidence fell to the lowest level since 2003. Low consumer confidence doesn't bode well for consumer spending. I believe the tax rebates will help, however most will go into gas tanks, to grocery stores, and on credit cards. However extra money and good weather usually pick up people's spirits.

Last week we reported Springfield had a net increase of 163 jobs in 2007, not nearly enough to put a dent in the record inventory of homes for sale. Yesterday the governor announced plans to relocate 148 employees from IDOT's traffic safety division to Southern Illinois. This would be a devastating blow to the local economy, and to the families that will be uprooted.

This could add more homes for sale within the local market, when there are 1801 homes listed for sale today, a record for this date. Only one in four listings have sold this year, there is noticeable downward pressure on home prices, it is taking longer to sell, and job growth is already anemic. Yet we remain one of the best housing markets in the Midwest.

If the governor is successful in relocating these 148 jobs and families, these families will have to sell their homes during very tough market conditions, exacerbating their personal dilemma.

With over 600,000 square feet of vacant office space in Springfield, you'd think the governor and IDOT could leave their expensive lease and move to more affordable space in Springfield. This is another example of changing the way we do business in Springfield as promised by this governor during his campaigns.

Regrettably for the families affected by this proposal, for the community of Springfield, and for the people of the state of Illinois, in my opinion all are having to suffer the consequences of the most inept, and possibly the most corrupt leadership in the history of the state, and that's saying something in Illinois.

How are you all enjoying the; "change the way we're going to do business in Springfield", promised by Blagojevich? I guess voting for change, for the sake of change, has its' perils.

Although recall legislation failed this week, there will be a recall in 2010. Hopefully the damage to the state caused by this administration can be repaired in a reasonable amount of time. Hang in there folks, brighter days lay ahead.