Mid Month Pricing Update and Forecast
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 December 15, we are currently recording a sales $/SF of $125.42 averaged for all areas and types across the ARMLS database. This is 0.2% higher than the $125.17 we now measure for November 15. Our forecast range was $125.34 to $130.46 with a mid-point of $127.90. This month the actual result was just above the bottom of the forecast range.
On December 15 REO sales across Greater Phoenix (all types) averaged $91.32 per sq. ft. (up 5.9%). Pre-foreclosures and short sales averaged $97.07 (up 2.5%) while normal sales averaged $130.10 (down 0.9%). The market share of normal sales increased over the last 30 days, moving from 84.4% to 85.4% of sales. REOs also gained market share from 6.9% to 7.4%. Short sales and pre-foreclosures were the big losers declining from 8.7% to 7.3%. With normal sales accounting for well over 85% of sales units, fluctuations in the pricing of REOs and short sales are having only a small impact on the market. It is the pricing for normal sales that has the dominant impact. However the price of all distressed sales, especially REO rose fast over the last month.
On December 15 the pending listings for all areas & types showed an average list $/SF of $124.25, 1.9% above the reading for November 15. Among those pending listings we have 68.0% normal, down from 68.1% last month, a higher 10.2% in REOs and a lower 21.9% in short sales and pre-foreclosures. The average pricing for pending listings within Greater Phoenix on December 15 in each category was: $139.93 normal, $86.25 short sales & pre-foreclosures and $88.71 for REOs. All categories are higher than they were last month.
Our mid-point forecast for the average monthly sales $/SF on January 15 is $127.55, which is 1.7% higher than the December 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $125.00 to $130.10. In other words we expect prices will move ahead in the next 31 days. Despite the balanced state of the market, momentum is still carrying sales prices a little higher, though this is unlikely to last for long.
Information brought to you by Cromford Report.
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