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 month.
For the monthly period ending July 15, we are currently recording a sales $/SF of $162.17 averaged for all areas and types across the ARMLS database. This is down 1.3% or $2.05 from the $164.22 we now measure for June 15. Our forecast range midpoint was $163.80, with a 90% confidence range of $160.52 to $167.08. The actual result was much lower than the mid-point, but well within our 90% confidence range. As expected, we saw the usual 3Q decline but it was stronger than we forecast.
On July 15 the pending listings for all areas & types shows an average list $/SF of $166.49, up 0.5% from the reading for June 15. Among those pending listings we have 96.6% normal, 1.3% in REOs and 2.1% in short sales and pre-foreclosures. This mix is little changed from last month, with a small decrease in short sales and pre-foreclosures and a small increase in bank-owned homes.
Our mid-point forecast for the average monthly sales $/SF on August 15 is $162.48, which is 0.2% above the July 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $159.23 to $165.73.
We are expecting the third quarter quarter $/SF slump to continue during August. A forecast recovery of 0.2% between now and August 15 would not regain the heights achieved during the second quarter.