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 $132.97 averaged for all areas and types across the ARMLS database. This is 0.3% above the $132.54 we now measure for September 15. Our forecast range was $131.99 to $137.37 with a mid-point of $134.68. The actual result did lie within our forecast range, but very much towards the lower end, despite the 0.3% increase.
On October 15 the pending listings for all areas & types showed an average list $/SF of $139.44, 1.2% above the reading for September 15. Among those pending listings we have 87.6% normal, 4.3% in REOs and 8.2% in short sales and pre-foreclosures.
Our mid-point forecast for the average monthly sales $/SF on November 15 is $134.11, which is 0.9% higher than the October 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $131.64 to $137.02.
We expected stronger pricing over the last 30 days, but this did not really materialize in any big way. We still anticipate getting above $134 per sq. ft., but it looks like this will take about a month longer than we thought.
This commentary was provided by Michael Orr of the Cromford Report. Michael Orr is the Director of the Real Estate Center at the W.P. Carey School of Business at Arizona State University.