Each month about this time we look back at the previous month, analyze how Phoenix Area pricing has behaved and report on how well our forecasting techniques performed. We also give a housing market forecast for how pricing will move over the next month.
For the monthly period ending August 15, we are currently recording a sales $/SF of $193.75 averaged for all areas and types across the ARMLS database. This is up 4.3% from the $185.69 we now measure for July 15. Our forecast range mid-point was $190.30, with a 90% confidence range of $186.49 to $194.11. The actual result was within 36 cents of the upper bound and far higher than our mid-point forecast. In other words, closed prices turned out to be much stronger than we anticipated. A key reason for this is the strong representation in the sale mix of homes over $1 million.
On August 15 the pending listings for all areas & types show an average list $/SF of $195.26, up 0.9% from the reading for July 15. Among those pending listings we have 98.7% normal, 0.8% in REOs and 0.5% in short sales and pre-foreclosures. There are even fewer distressed homes in the mix than we have seen recently.
Our mid-point forecast for the average monthly sales $/SF on September 15 is $195.65, which is 1.0% above the August 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $191.74 to $199.56.
The last 2 months have seen the average $/SF rise by 7.2%. This is a greater rise than we saw for the whole of the preceding 12 months, so appreciation has taken off like a rocket. Over the next month we expect to see a deceleration. Prices will probably continue to rise but at a less frenetic pace. However a 1% rise in a single month is still consistent with double digit appreciation for the whole year. CoreLogic’s forecast for a fall in prices by the middle of 2021 is looking very exposed and we expect them to revise it shortly.
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