REAL ESTATE MARKET UPDATE 85050SEARCH PROPERTIES IN 85050Each month about this time we look back at the previous month, analyze how pricing has behaved, and report on how well our forecasting
Real Estate Market Update 85050
REAL ESTATE MARKET UPDATE 85050
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 month.
For the monthly period ending May 15, we are currently recording a sales $/SF of $179.91 averaged for all areas and types across the ARMLS database. This is down 3.5% from the $186.69 we now measure for April 15. Our forecast range midpoint was $182.08, with a 90% confidence range of $178.44 to $185.72. The actual result was well within this interval but more than $2 lower than the mid-point. In other words, closed prices turned out to be significantly weaker than we anticipated. This is the same situation as seen in the last two months. The primary reason for lower average pricing is the absence of the usual number of high-end homes which typically sell for very high prices per sq. ft. This became more extreme in the last 4 weeks as the regular market started to build in volume while the market over $1 million did not.
On May 15 the pending listings for all areas & types show an average list $/SF of $184.18, down 2.4% from the reading for April 15. Among those pending listings we have 98.4% normal, 0.7% in REOs, and 0.9% in short sales and pre-foreclosures. These are the same percentages as the ones we recorded last month.
Our mid-point forecast for the average monthly sales $/SF on June 15 is $177.32, which is 1.4% below the May 15 reading. We have a 90% confidence that it will fall within ± 2% of this midpoint, i.e. in the range $173.77 to $180.87.
Our forecast calls for another fall. Once again, this is not because home values are dropping. In fact, they are continuing to rise in most sectors under $600,000. The market under $600,000 is gaining traction except for the retirement communities. However the higher end of the market has stalled to a much greater degree than the low and mid ranges. Without all those homes selling over $400 per square foot, the market average has to fall. We are going through an unusual situation and pricing data will be much less reliable due to the lower volumes and changes to the normal mix.
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