Metro Phoenix Home Sales Data from Your Gilbert Realtor
Mid Month Pricing Update and Forecast via The Cromford Report.....
Each month about this time we look back at the previous month, analyze how pricing has behaved and report on how well our forecasting techniques performed. We also give a forecast for how pricing will move over the next 30 days.
For the monthly period ending October 17, we are currently recording a sales $/SF across all areas and types of $83.17 averaged for all areas and types - down 1.5% from $84.39 on September 17. We hit a low point of $81.96 on October 11 and bounced back up a little in the following week. Our forecast range was $80.56 to $83.84 and prices have stayed within that range since September 20.
Today the pending listings for all areas & types show an average list $/SF of $86.66. This statistic has shown a general upward trend since mid September and suggests that we will see some improvement in pricing over the next month. Our mid-point forecast for the average monthly sales $/SF on November 16 is currently $84.04, which is 1.1% above today's actual reading of $83.17, and we have a 91% confidence that it will fall within ± 2% of this mid point, i.e. in the range $82.36 to $85.72. The actual price change we see will depend very much on the mix between lender owned, short-sales, pre-foreclosures and normal sales which has seen some large fluctuations in recent months. In particular, short sales have lost market share to REOs. At the same time REOs and normal sales have seen their average sales price fall while short sales have edged upwards.
The Cromford Market Index™ is intended to give us a simple measure of the balance between supply and demand and hence the long term direction for pricing. Since the beginning of October the Cromford Market Index™ has moved slightly higher but is still well below the balanced figure of 100. The recent increase is due to an improvement in pending listing counts relative to normal seasonal patterns, suggesting that the significant drop in prices over the summer has increased demand. This is particularly true for condos and especially for "Apartment Style / Flat" residences. However supply is still increasing steadily and prevents that increased demand from creating a situation that would lead to a long term recovery in prices. We believe it is likely that prices will rise a little over the next month or two, but the long term direction is still negative. To restart the postponed recovery we will need either a more significant improvement in demand or a major drop in supply. Neither of these are yet visible on the short term horizon.