The consistency in the number of home sales within the local housing market should be the envy of the state and nation. Considering that 2003, 2004, and 2005 were seller's markets, and 2006, 2007 were buyer's markets; look at the consistent number of home sales as reported by member brokers to The Capital Area Association of Realtors (CAAR) MLS:

2003 3996
2004 4005
2005 4197*
2006 4175
2007 3998
*CAAR record high

The rise in the median sale price of a home in the face of an oversupply of homes for sale defies the laws of supply and demand as witnessed below:

2003 $90,500
2004 $92,750
2005 $100,000
2006 $99,000
2007 $104,500*
*CAAR record high

The only reason 2006, and 2007 were buyer's markets was due to the record number of homes for sale.

The news is full of stories about the impending explosion of foreclosures when homeowners who have adjustable rate mortgages have their rates increased under the terms of the mortgages they voluntarily signed at purchase. Let's examine this phenomenon.

The country experienced the greatest real estate market for the number of sales in history from 2001 through 2005.

An interesting thing happened in the housing market when interest rates fell below 6% for only the second time since the 1960's; sales declined. With most lenders offering 30 year loans at 5.7%, and 15 year loans at 5% you would expect prospective buyers to rush the market like parents after Hannah Montana tickets. You would be mistaken.

Home sales pending closing year to date through three business weeks were at the lowest level since 2001, down from 207 in 2007 to 126 in 2008, a 39% decline.

Buying a home shouldn't be a hassle, an aggravation, time consuming, or costly. Regrettably many prospective home buyers will have that type of experience. The reasons why? Lack of experience buying and selling homes. Let's face it many people have never bought a home, and many have not done so for years. All the while the rules within the real estate market change constantly, except one; home buyers make the same mistakes every year.

The Capital Area Association of Realtors (CAAR) had member brokers reporting to the MLS that closed home sales fell in January by over 27%. In spite of interest rates falling below 6%, and unemployment rates locally of 4.9%, sales pending closing fell in January by over 25% from 2007. This marks the fifth consecutive monthly decline in sales pending.

The following five examples represent commonly held perceptions by many consumers, and advice for the proper action a consumer should take.

1. Relatives know infinitely more about real estate than any real estate professional, always listen to relatives first. Mom and Dad last bought a home in the 1980's, there's only been 32,416 rules changes since.

This week governor Blagojevich presented his State of the State, Budget address. Again we heard a speech long on rhetoric and short on detail. I hope our legislators receive a copy of the budget more than 24 hours before a vote is required. All signs point to another stalemate, and drawn out session.

I don't claim to be a budgetary expert, however it was obvious to me that the governor continues his drive for new programs when we can't pay for the programs we have.

This past weekend I traveled north to St. Charles Illinois. Took the train to downtown Chicago for my wife and daughter to shop, and to visit the museums. Sure doesn't appear to be any lack of people shopping downtown Chicago. If there is a recession ongoing they sure didn't get the memo!

One note of interest was the Cook County Board raised sales taxes to the highest in the nation at 10.

Wow, what a week in the news; Eliot Spitzer, Geraldine Ferraro, Tony Rezko, Jeremiah Wright, and gas prices jumping to record highs.

What impact do these people and events have upon the housing market? Plenty. Experts were surprised this week to learn that the predicted increase in retail sales in February never materialized as retail sales fell .

Wow, what a week in the news; Eliot Spitzer, Geraldine Ferraro, Tony Rezko, Jeremiah Wright, and gas prices jumping to record highs.

What impact do these people and events have upon the housing market? Plenty. Experts were surprised this week to learn that the predicted increase in retail sales in February never materialized as retail sales fell .