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 August 15, we are currently recording a sales $/SF of $149.14 averaged for all areas and types across the ARMLS database. This is down 1.0% from the $150.60 we now measure for July 15. Our forecast range midpoint was $149.67, with a 90% confidence range of $146.68 to $152.66. The actual result was fairly close to our predicted mid-point, coming in 53c below.
On August 15 the pending listings for all areas & types shows an average list $/SF of $154.28, down 0.06% from the reading for July 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 is exactly the same as in July.
Our mid-point forecast for the average monthly sales $/SF on September 15 is $149.01, which is 0.1% below the August 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $146.03 to $151.99.
So although last month’s decline was a little more expected, we are forecasting a small 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.