from The Cromford Report January 15, 2022

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 January 15, we are currently recording a sales $/SF of $271.09 averaged for all areas and types across the ARMLS database. This is up 2.6% from the $264.18 we now measure for December 15. Our forecast range mid-point was $273.21, so we were expecting a 3.4% rise and saw instead a 2.6% increase. However the result was still well within our 90% confidence window. The monthly average $/SF can often vary by as much as 1% from day to day, but we clearly experience a large increase in average price per square foot over the past month.

On January 15 the pending listings for all areas & types show an average list $/SF of $277.14, up 1.0% from the reading for December 15. Among those pending listings we have 99.5% normal, 0.2% in REOs and 0.3% in short sales and pre-foreclosures. This is the same as last month and the short sale and pre-foreclosure percentages remain extremely low and are having no impact whatsoever on market pricing.

Our mid-point forecast for the average monthly sales $/SF on February 15 is $274.59, which is 1.5% above the January 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $269.10 to $280.08. Prices were flat between November and December but rose almost 3% in the last 4 weeks. We can reasonably expect a rate of increase of about 1.5% per month in the current market conditions and this is consistent with the recent past. Market conditions may change, but they have not shown signs of doing so yet.