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 March 15, we are currently recording a sales $/SF of $129.62 averaged for all areas and types across the ARMLS database. This is 3.6% higher than the $125.10 we now measure for February 15. Our forecast range was $125.65 to $130.77 with a mid-point of $128.21. This month the actual result was well within the forecast range, but significantly above the mid-point.
On March 15, REO sales across Greater Phoenix (all types) averaged $93.06 per sq. ft. (up 9.8%). Pre-foreclosures and short sales averaged $99.14 (up 0.9%) while normal sales averaged $134.16 (up 2.3%). The market share of normal sales increased over the last 31 days, moving from 84.3% to 87.3% of sales. REOs lost market share from 9.3% to 7.6%. Short sales and pre-foreclosures also lost market share from 6.4% to 5.1%. The pricing of REOs has been especially volatile and unpredictable over the last four months.
On March 15 the pending listings for all areas & types showed an average list $/SF of $129.42, 0.5% above the reading for February 15. Among those pending listings we have 77.9% normal, up from 74.5% last month, a lower 8.6% in REOs and a much lower 13.6% in short sales and pre-foreclosures. The average pricing for pending listings within Greater Phoenix on March 15 in each category was: $139.85 for normal, $88.31 for short sales & pre-foreclosures and $88.58 for REOs. The pending pricing for normal sales and REOs is lower than last month. However, the continuing shift towards normal listings and more higher priced homes in the sales mix is expected to drive the average $/SF for monthly sales a little higher yet, despite the weaker demand and growing supply.
Our mid-point forecast for the average monthly sales $/SF on April 15 is $129.94, which is 0.2% higher than the March 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $124.34 to $132.54. We are not confident that the median sales price will follow suit. The median sales price is not assisted by the relative strength in the luxury market that is helping to support the average price per sq. ft. However with the low end of the market also looking weak, stronger volumes of mid-range sales could cause the median to drift upwards over the next couple of months.
We continue to expect the price range between $125 and $135 per sq. ft. 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 current conditions we expect the strongest pricing of the year to occur between March and June and any possible breakout over $130 is likely to be short-lived.