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 February 15, we are currently recording a sales $/SF of $125.47 averaged for all areas and types across the ARMLS database. This is 0.2% lower than the $125.74 we now measure for January 15. Our forecast range was $123.78 to $128.84 with a mid-point of $126.31. This month the actual result was well within the forecast range, but well below the mid-point.
On February 15 REO sales across Greater Phoenix (all types) averaged $84.77 per sq. ft. (down 4.9%). Pre-foreclosures and short sales averaged $98.47 (up 1.9%) while normal sales averaged $131.57 (down 0.5%). The market share of normal sales increased over the last 31 days, moving from 82.7% to 84.2% of sales. REOs gained market share from 8.7% to 9.2%. Short sales and pre-foreclosures lost market share from 8.4% to 6.5%. The pricing of REOs has been especially volatile and unpredictable over the last three months.
On February 15 the pending listings for all areas & types showed an average list $/SF of $128.84, 3.0% above the reading for January 15. Among those pending listings we have 74.5% normal, up from 68.8% last month, a lower 9.7% in REOs and a much lower 15.9% in short sales and pre-foreclosures. The average pricing for pending listings within Greater Phoenix on February 15 in each category was: $141.10 for normal, $87.16 for short sales & pre-foreclosures and $92.49 for REOs. All categories are higher than last month and this suggests that pricing, as measured by average price per square foot, will rise over the next month.
Our mid-point forecast for the average monthly sales $/SF on March 15 is $128.21, which is 2.7% higher than the February 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $125.65 to $130.77. In other words we expect $/SF prices will be somewhat higher next month. We are not confident that the median sales price will follow suit. It is primarily strength in the luxury market that is fueling the increases in average price per sq. ft. The rest of the market is looking weak.
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. In the medium term the market conditions indicate that a drop below $125 is more likely than a rise above $130.