Mid Month Pricing Update and Forecast July 2017
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 July 15, we are currently recording a sales $/SF of $150.52 averaged for all areas and types across the ARMLS database. This is down 0.4% from the $151.10 we now measure for June 15. Our forecast range midpoint was $152.16, with a 90% confidence range of $149.12 to $155.20. Although the actual result fell within the confidence interval, it was well below the mid-point and represented a fall from last month instead of a rise.
On July 15 the pending listings for all areas & types shows an average list $/SF of $154.38, down 0.3% from the reading for June 15. Among those pending listings we have 95.1% normal, 1.7% in REOs and 3.2% in short sales and pre-foreclosures. This mix contains fewer REOs but more short sales and pre-foreclosures than last month. Overall distress continues to fall.
Our mid-point forecast for the average monthly sales $/SF on August 15 is $149.67, which is 0.6 below the July 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $146.68 to $152.66.
So although last month’s decline was a little unexpected, we are forecasting a continued decline over the next 31 days.
This downward pattern is normal for the time of year and does not reflect any deterioration in market conditions. The luxury market loses a lot of sales volume during the hottest months, whereas the rest of the market slows to a lesser extent. We expect the upward price trend to resume once we get to the end of September.