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 January 15, we are currently recording a sales $/SF of $125.60 averaged for all areas and types across the ARMLS database. This is 0.5% higher than the $125.00 we now measure for December 15. Our forecast range was $125.00 to $130.10 with a mid-point of $127.55. This month was similar to last month in that the actual result was just above the bottom of the forecast range.
On January 15 REO sales across Greater Phoenix (all types) averaged $89.16 per sq. ft. (down 2.8%). Pre-foreclosures and short sales averaged $94.43 (down 1.0%) while normal sales averaged $132.23 (up 1.8%). The market share of normal sales decreased over the last 30 days, moving from 84.9% to 82.7% of sales. REOs gained market share from 7.6% to 8.5%. Short sales and pre-foreclosures also gained market share increasing from 7.5% to 8.8%. With normal sales accounting for a smaller share and the price of REOs and short sales declining, the forecast ended up looking a little too optimistic. However the continued increase in pricing for normal sales kept the final number within our forecast range. The pricing of REOs has been especially volatile and unpredictable over the last two months.
On January 15 the pending listings for all areas & types showed an average list $/SF of $125.02, 0.6% above the reading for December 15. Among those pending listings we have 68.8% normal, up from 68.0% last month, a higher 11.2% in REOs and a lower 20.0% in short sales and pre-foreclosures. The average pricing for pending listings within Greater Phoenix on January 15 in each category was: $140.07 normal, $86.24 short sales & pre-foreclosures and $88.65 for REOs. All categories are little changed from last month and pricing has reached a fairly stable level.
Our mid-point forecast for the average monthly sales $/SF on February 15 is $126.31, which is 0.6% higher than the January 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $123.78 to $128.84. In other words we expect prices will be roughly where they are now. 0.6% is the type of variation we see from one day to the next, so changes of this magnitude are just statistical noise.
We continue to expect the price range between $125 and $130 to be a natural resting point after the rapid rise from $78 that has occurred since September 2011. It will take a change in market conditions for prices to move significantly out of this range.