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 December 15, we are currently recording a sales $/SF of $138.06 averaged for all areas and types across the ARMLS database. This is 1.7% above the $135.76 we now measure for November 15. Our forecast range was $132.84 to $138.26 with a mid-point of $135.55. The actual result did lie within our forecast range, but very much towards the high end this time.
On December 15 the pending listings for all areas & types shows an average list $/SF of $141.12, 1.9% above the reading for November 15. Among those pending listings we have 88.6% normal, 4.2% in REOs and 7.2% in short sales and pre-foreclosures. This has barely changed from this time last month
Our mid-point forecast for the average monthly sales $/SF on January 15 is $140.72, which is 1.9% higher than the December 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $137.91 to $143.53.
The last two months have given us actual readings well above the midpoint for the forecast. Our forecast calls for another strong advance for the third month in a row. However we note that January tends to be a weak month for pricing while December often surprises to the upside. It would not surprise us if this year follows the usual pattern.
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.