A Pricing Perspective Courtesy of WAVE – The ARMLS Magazine Aug/Sept 2011

The addition of the Supplement in the June issue of STAT™ to the Pending Price Index (PPI) adds a new perspective to the Valley pricing. It forecasts how prices are changing in monthly increments over four succeeding months, enabling Subscribers to watch, albeit in slow motion, pricing in recovery.

While the industry standard for tracking prices is the rise and fall of average and median prices, the PPI Supplement tracks the average and median price in specific price ranges added each month to pending sales. By grouping the most current four month data, it is possible to watch each price range shift in the dominance hierarchy.

In reality, the pricing pattern as a result of the recession, has shifted to the left of the price range scale. To illustrate the shift, Figure 1 and Figure 2 depict the distribution of sold properties per price range for 2004 to 2011, respectively. We chose to illustrate the shift using sold properties because pending data for 2004 is not available. Since 2004 was the last year before the 2005-2007 boom, and represented a healthy market, it was the ideal year to illustrate the pricing shift.

The gray scale bars in Figure 1 depict the distribution of sales per price range for January, February, April and May of 2004. During this time the predominance of homes sold were in the $100,001-$150,000 range, followed by $150,001-$200,000, and then by $50,001-$100,000. Here most of the action (~58%) is in the range from $50,000-$250,000. Even back in 2004, as is the case in 2011, activity in the ranges above $500,000 was only a small market percentage.

The red scale bars in Figure 2 shows the same month span for 2011 with the majority of units sold to be in $50,001-$100,000 range, followed by the $50,000 and under and then $100,001-$150,000. Most of the action(~68%) is $150,000 and below.

As pricing rights itself, expect the percent of homes in the higher ranges to increase, shifting the pricing pattern to the right.

Watch the PPI Supplement each month in STAT to monitor the shift.

WAVE – the ARMLS magazine August / September 2011

Contributor – Chris Heagerty, Director –Communication, Professional and Business Development

Tags: Arizona Valley Home Pricing, Forecaset Arizona Home Market Values, home sales per price range in Arizona, Picning Arizona Homes for Sale, Tracking home pricing in the Valley Arizona, What's My Home Worth in Arizona

Posted on Friday, July 29th, 2011 at 8:00 am and is filed under Housing Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.