Welcome to Springfield Illinois, the home of Lincoln and the state capital. Oh yes, surrounded by the richest farmland in the nation three hours south of the socialist incubator mother ship Chicago, is home to one of the most stable and predictable housing markets.
This is a market that usually runs opposite the nation. During the 1990’s when the national market was going gangbusters, and prices were rising, Springfield was mired in a buyer’s market while realizing a 9.9% appreciation rate for the entire decade. Steady Eddie one could say.
Why? Springfield was and is dependent upon government jobs, the number one employer in the county until the medical industry surpassed government in 2011. The same year the local MLS reported the fewest home sales since 1998. Must have been those outrageous 4% interest rates keeping buyers away from the market. Or perhaps it was a lack of jobs? The city, county, and state governments were forced to cut jobs following a collapse in tax revenues.
Due to stellar leadership from Governor Blagojevich, who gave his teary farewell I’m off to meet Bubba speech on Wednesday, spending mushroomed along with budget deficits, union pay and benefits. If not for those nasty people from the hospitals wearing a wire while Blago was shaking them down for donations, we would never have been blessed with Patrick Quinn.
The attack on disposable income commenced. Because of the infinite number of absolutely necessary new unfunded programs, that if cut would cause every red headed twin to the cousin of a foster child not living in a home making $84,000 a year to lose benefits, Quinn had no choice but to raise the income tax on families by 67%. Good bye disposable income.
You know our favorite son and student of Chicago’s famous Alinsky school for deceiving the public, Barack Obama who has no control over gas prices, resulted in the environmentally friendly highest average per gallon gas price in history in 2011, and is on pace to best that record in 2012, further assaults disposable incomes.
Funny thing happened at the grocery store. Seems the rising gas and oil prices resulted in the highest food inflation in twenty years. But not to worry, your government tells you there’s no inflation. Bye, bye disposable income.
ZeroHedge’s Tyler Durden says the Fed will implement more quantitative easing to fill a $3.6 trillion hole in the traditional banking system. At the BusinessInsider Peter Schiff of Euro Pacific Capital published a chilling article; America is on the mother of all adjustable rate mortgages.
What does this mean? The government is lying to you about inflation, our financial system and stock market are built upon a Fed printing press house of cards and as Schiff says; Just as homeowners had a good run pulling equity from their overvalued properties, Washington and Wall Street will soon find the music turned off.
This means trouble in River City; double digit inflation, and double digit interest rates coming to America soon. Boom goes disposable income.
Then there are proposed water, sewer, electric rate hikes, and school bond referendums, since government recognizes people are flush with cash. Goodbye disposable income.
When families see their money disappear, they either won’t or can’t spend on other goods and services. Ought oh, that means fewer will be interested in buying a home, and there goes the housing market again.
The good news is the Springfield market is off to the best start for homes going under contract in four years, up a whopping 23%, bringing numbers back up to almost normal. The bad news is that closed sales are up .4%, yes- point four percent. What gives? Hello Dodd Frank throwing sand into the gears of the housing market, here, there, and everywhere across America today.
People must intuitively know rates are going to go up soon, and are rushing the market. That’s the sum total of demand, because it sure isn’t because Obama, or Quinn are getting government out of the way so the private sector can create jobs. That too is an illusion brought to you compliments of the diversionary left, Obama B(L)S, and sycophant media.
My advice, put your hand over your wallets and purses. The government is low on money, so they’re coming for yours, relentlessly.
The opinions expressed here are solely those of Fritz Pfister or identified sources, and not necessarily those of RE/MAX Professionals of Springfield or RE/MAX International.
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