Tenuous Times in Illinois Housing Markets and Why

By: Fritz Pfister

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.

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