Home Prices Continue to Rise Around the Valley
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 30 days. For the monthly period ending January 15, we are currently recording a sales $/SF of $157.68 averaged for all areas and types across the ARMLS database. This is up 1.1% or $1.65 from the $156.03 we now measure for December 15. Our forecast range midpoint was $155.13, with a 90% confidence range of $152.03 to $158.23. The actual result was a lot stronger than the mid-point but still within the confidence range. It is very common for January's reading to be lower than December's, so the fact that it is not in 2018 is an indication of the current strength of most sellers' negotiating position.
On January 15 the pending listings for all areas & types shows an average list $/SF of $161.40, up 1.2% from the reading for December 15. Among those pending listings we have 95.1% normal, 1.8% in REOs and 3.2% in short sales and pre-foreclosures. This mix is almost the same as last month. REO activity remains low at the moment compared to historic rates, though short sale activity remains slightly elevated as an after-effect of the housing crash.
Our mid-point forecast for the average monthly sales $/SF on February 15 is $159.14, which is 0.9% above the January 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $155.95 to $162.31. We are therefore predicting a similar rise over the next 31 days to the one we just experienced between December and January. So far in 2018, with 14 days of new listings to go on, we have seen a 1.3% decline in new supply over the same period in 2017. Obviously this not going to rebalance the market in favor of buyers.