You’ve probably heard us hinting at recovery around here, but it looks like we finally have some solid data to back up our claims! Over the past year, the Casa Grande area has experienced some fluctuation in pricing coupled with a large inventory for buyers to choose from. This has all changed over the past 6 months. We have a clear picture of the average price per square foot inching its way upwards since July 2011.
The red bar on the graph indicates the average price per square foot of active listings, which has an upward trend since June. This category typically leads the pack since it indicates what is currently trending in new listings. The blue bar indicates the homes that are in escrow or that have a buyer that has contractually agreed to purchase the home. This is usually the second fastest indication of a trend since most of these will typically show in the green bar the next month, or the month after depending on how long the closing period is. The green bar indicates the average price per square foot of sold properties. This one is the truest indicator of change, but is typically 1 to 3 months behind the red bar or active listings.
So why would closed sales be so far below the active listings? Ah yes, a valid question and concern. One word: Appraisals.
Because appraisals are completed during the escrow or closing period, they utilize data that is one to three months behind. The data that is most considered in an appraisal is sold data – which is typically not on the cutting edge of the market – which is clearly illustrated in the graph above.
This is the time to jump in if you’ve been sitting on the fence!