Back on August 8 we said that the gap between the average $/SF for listings under contract and the average $/SF for closed listings was too large. This gap has now reduced substantially as you can see from the chart below:

There are two pieces of bad news for sellers and one piece of good news in this chart. The good news is that the average list price $/SF for closed listings has increased over the past 4 weeks from around $289 to $296. This is not consistent with the idea that the market is crashing.

The first piece of bad news is that the achieved sales prices have dropped further below the final list prices and so the average sale price $/SF has only advanced from around $285 to $289. This is much less than the increase in the list price $/SF. This modest rise is much better than a decline, but it confirms that sellers' negotiation power is far weaker than it has been for many years.

The second piece of bad news is that the average $/SF for listings under contract has descended from over $312 to below $302 during the same 4 weeks. Unless this starts rising again, the brown line is not going to be able to sustain its current rising trend. It would be very unusual for the green line to drop below the brown line. So if the green line continues its decline, the brown line must turn around.

This chart is one to watch over the next few months and you can find the latest version here.

Market insights provided by The Cromford Report.