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 March 15, we are currently recording a sales $/SF of $140.07 averaged for all areas and types across the ARMLS database. This is up 0.6% from the $139.17 we now measure for February 15. Our forecast range midpoint was $137.72, with a 90% confidence range of $134.97 to $140.47. Pricing over the last 29 days has been stronger than expected but stayed within the upper bound of our 90% confidence range.
On March 15 the pending listings for all areas & types shows an average list $/SF of $143.01, 1.7% above the reading for February 15. Among those pending listings we have 92.0% normal, 2.9% in REOs and 5.0% in short sales and pre-foreclosures. The percentage of distressed transactions continues to fall and the fall has accelerated over the last month.
Our mid-point forecast for the average monthly sales $/SF on April 15 is $142.59, which is 1.8% higher than the March 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $139.74 to $145.44.
In most years, prices make strong progress between March and June so it is not unusual that we predict a significant increase for April. The Cromford® Market Index has stabilized and there is now a strong upward trend in pricing for homes under $250,000 balanced by a weak downward trend for homes over $500,000. The overall price averages will depend on the mix of sales that are closed over the next 31 days.
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.