Mid Month AZ Housing 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 February 15, we are currently recording a sales $/SF of $159.13 averaged for all areas and types across the ARMLS database. This is up 1.0% or $1.53 from the $157.60 we now measure for January 15. Our forecast range midpoint was $159.14, with a 90% confidence range of $155.95 to $162.31. The actual result was just 1 cent below the mid-point, which means the forecast we gave last month was our most accurate ever.
On February 15 the pending listings for all areas & types shows an average list $/SF of $163.65, up 1.4% from the reading for January 15. Among those pending listings we have 96.4% normal, 1.5% in REOs and 2.1% in short sales and pre-foreclosures. This mix includes fewer distressed properties than last month. REO activity remains low at the moment compared to historic rates, and short sale activity declined sharply although it remains slightly elevated as an after-effect of the housing crash.
Our mid-point forecast for the average monthly sales $/SF on March 15 is $160.74, which is 1.3% above the February 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $157.53 to $163.95.
We are therefore predicting a similar rise over the next 28 days to the one we just experienced between January and February. So far in 2018, with a month and a half of new listings to go on, we have seen a 1.5% decline in new supply over the same period in 2017. Obviously this not going to rebalance the market in favor of buyers. Prices will continue to trend higher until we see either far more supply or much lower demand.