End of January 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 month.
For the monthly period ending January 15, we are currently
recording a sales $/SF of $214.92 averaged for all areas and types across the
ARMLS database. This is up 3.0% from the $208.70 we now measure for December
15. Our forecast range mid-point was $212.50, with a 90% confidence range of
$208.25 to $216.75. Prices rebounded sharply from the brief lull in early
December and came in $2.42 higher than we forecast. However the actual result
was well within the 90% confidence interval.
On January 15 the pending listings for all areas & types
show an average list $/SF of $218.10, up 2.2% from the reading for December 15.
Among those pending listings we have 98.8% normal, 0.5% in REOs and 0.7% in
short sales and pre-foreclosures. There has been little change in these
percentages compared with last month, and the number of distressed sales
remains extremely low by historic standards.
Our mid-point forecast for the average monthly sales $/SF on
February 15 is $220.18, which is 2.4% 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 $215.78 to $224.58.
Average sale $/SF has risen 15.8% in the last 6 months,
equivalent to an annual appreciation rate of over 31%. If our forecast proves
accurate the next month will take us to an 18.6% increase over 7 months.
