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 September 15, we are currently recording a sales $/SF of $78.83 averaged for all areas and types. This is 0.7% lower than the $79.40 we now measure for August 16. Our forecast range was $77.17 to $80.21 with a mid-point of $78.74. Once again our forecasting technique proved remarkably accurate as the actual figure is only 9 cents higher than the mid point of our forecast range. The reason for the unusual accuracy over the last two months is that the market has remained fairly stable although it did change substantially after mid June. For the last three months sales activity has been concentrated at the bottom end of the market with the middle and top end much weaker than during the spring.

On September 15 REO sales across Greater Phoenix (all types) averaged $61.65 per sq. ft. (up a substantial 3.5% from August 16). Pre-foreclosures and short sales averaged $73.27 (down 0.3%) while normal sales averaged $100.73 (down a startling 4.9%). Normal sales gained market share, moving from 32.4% to 33.1% of sales, while REOs lost substantial market share, moving from 45.0% to 41.4%. Short sales and pre-foreclosures were the winners again this month, moving from 22.6% to 25.4% and recovering from a dip in August after a strong spike at the end of June.

On September 16 the pending listings for all areas & types showed an average list $/SF of $78.47, 0.5% above the reading for August 16 - the first time we have seen a rise for several months. Among pending listings we have 27.6% normal, a sharply declining 35.0% REO and a fast growing 37.4% in short sales and pre-foreclosures. The average pricing for pending listings on August 16 in each category were: $108.70 normal, $68.90 short sales & pre-foreclosures and $60.82 for REOs. We can see that compared with last month the pending $/SF averages are up for REOs, but down for normal listings and (especially) short sales.