Mid Month AZ Home 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 October 15, we are currently recording a sales $/SF of $150.21 averaged for all areas and types across the Arizona Regional Multiple Listing Service (ARMLS) database. This is up $1.10 or 0.7% from the $149.11 we now measure for September 15. Our forecast range midpoint was $148.18, with a 90% confidence range of $145.22 to $151.14. The actual result was much stronger than our predicted mid-point, and we said last month that this would not surprise us. However it remained within our 90% confidence interval. Almost all of the increase happened in the last 7 days since the reading was at $149.20 as recently as October 8.
On October 15 the pending listings for all areas & types shows an average list $/SF of $155.74, up 1.7% from the reading for September 15. Among those pending listings we have 95.0% normal, 1.6% in REOs and 3.4% in short sales and pre-foreclosures. This mix is little changed from August, except that we have a slightly lower ratio of REOs to short-sales and pre-foreclosures. REO activity is very low at the moment compared to historic rates.
Our mid-point forecast for the average monthly sales $/SF on November 15 is $152.17, which is 1.7% above the October 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $149.71 to $155.83.
So we are forecasting the same percentage increase over the next 31 days that we have seen in the average price of pending listings over the past 30 days. This means the third quarter slump is well and truly over and we expect the usual surge in $/SF for the fourth quarter. Having said that, the actual number of pending listings is lower than usual. Only 2001, 2007 and 2014 saw lower pending listing readings as of October 15, so it appears that the current pricing level is putting a slight damper on demand, at least as far as pending counts is concerned. Sales counts are still looking healthy although the annual sales rate is no longer increasing as it had been. a few months ago. This means the market is not expanding as fast as as it was in the first half of 2017.