November 15, 2015
Mid Month 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 30 days.
For the monthly period ending November 15, we are currently recording a sales $/SF of $135.99 averaged for all areas and types across the ARMLS database. This is 2.1% above the $133.14 we now measure for October 15. Our forecast range was $131.43 to $136.79 with a mid-point of $134.11. The actual result did lie within our forecast range, but towards the higher end this time.
On November 15 the pending listings for all areas & types showed an average list $/SF of $138.45, 0.7% below the reading for October 15. Among those pending listings we have 88.7% normal, 4.0% in REOs and 7.3% in short sales and pre-foreclosures.
Our mid-point forecast for the average monthly sales $/SF on November 15 is $135.55, which is 0.3% lower than the November 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $132.84 to $138.26.
The expected jump in pricing took a bit longer than we thought but eventually happened suddenly. The average popped up from $134.14 to $136.140 over just 4 days from November 7 to 11. Our forecast calls for a very slight drift downwards, but there is an overall lack of direction at the moment and the final number will depend very much on the sales mix.
TRID is definitely causing closings to take longer at the moment so pending and UCB listings are piling up while closed sales are lower than normal. This was what we expected to see, but the effect has increased as time has progressed.