September Market Report

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 month.

For the monthly period ending September 15, we are currently recording a sales $/SF of $294.34 averaged for all areas and types across the ARMLS database. This is up a massive 4.6% from the $281.50 we now measure for August 15. Our forecast range midpoint was $288.56. We correctly forecast a rebound, but the size was even bigger than we anticipated - 4.6% rather than the 3.2% we calculated. The actual result was so strong that it only just fell within the upper 90% confidence interval. The last 4 months have been extremely volatile for price per sq. ft. which is partly a consequence of the lower completion counts. A smaller sample size tends to create more volatility in the averages. The median sales prices have been much more stable, since the high-end of the market has little to no effect on medians.

Anyone who was alarmed by last month's 4.2% dive must be relieved to see a bounce back of 4.6%. However, you should not have been alarmed. Prices almost always take a dip during the third quarter before recovering again from September onwards. 2024 was quite a bit dippier than normal.

On September 15 the pending listings for all areas & types show an average list $/SF of $326.35, down 0.6% from the reading for August 15. This suggests that prices will settle down between now and October, with fewer wild swings. Among those pending listings, we have 98.9% normal, 0.1% in REOs and 0.9% in pre-foreclosures (including a very small number of short sales). The level of foreclosure activity remains very low, but pre-foreclosures do appear to be on the rise.

Our midpoint forecast for the average monthly sales $/SF on October 15 is $292.55, which is down 0.6% from the September 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid-point, i.e. in the range $286.70 to $298.40.

The previous 3 months (May June July) were abnormally weak for sales prices, following an unusually strong April. We now have another abnormally strong month (August) to get us back into the mid $290s. We believe there might be a slight fall over the next month, but prices have been so volatile over the summer that it would nice if we could get a little more stability. The direction next month is not at all set in concrete.