Veros Projects More Home Appreciation In 2017

Veros projects that residential market values will continue their overall upward trend during the next 12 months, with overall annual forecast appreciation of +3.7% (up slightly from last quarter’s +3.5%). The insight comes from the company’s most recent VeroFORECAST, a quarterly national real estate market forecast for the 12-month period ending December 1, 2017.

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“Although we expect to see interest rates increasing and inflation ramping up, the overall labor market is expected to remain strong. These effects will essentially offset each other, and allow the overall national forecast to remain strong, and consistent with what has been predicted and observed in previous forecast updates,” says Eric Fox, VP of Statistical and Economic Modeling at Veros.

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Interestingly, Washington, Oregon, and Colorado monopolized the top positions in all of 2016, and continue to hold 9 of the top 10 markets in the forecast for the next 12 months. Seattle and Denver lead the way in the #1 and #2 spots with forecast appreciation of 10.9% and 10.2%, respectively. Bend, OR, Portland, OR, and Bremerton, WA round out the top five markets, and the northwest states of Washington, Oregon, Idaho, and Colorado represent 17 of the top 25 forecast markets demonstrating continued record-setting geographic concentration.

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On trend with last quarter’s forecast, the weakest five performing markets are expected to depreciate between 1% to 2.5%. “Thus, even these worst performing markets won’t see a significant drop,” says Fox. The worst performing market this quarter is expected to be Poughkeepsie, NY (- 2.5%). Binghampton, NY (-1.9%), Atlantic City (-1.8%), Cumberland, MD (-1.7%), and Vineland, NJ (-1.3%) rounds out the weakest five. Record geographic concentration also persists on the weaker end of the forecast spectrum with 6 of the 10 weakest markets residing in New Jersey, the Hudson Valley region of New York, and Connecticut.

In comparison to last quarter, VeroFORECAST predicts continued softening in the once-hot markets of South Florida and the Bay Area. Markets such as San Francisco and San Jose are down again by 1% to forecasts in the 5% range. Likewise, South Florida markets such as Miami and Fort Myers are down another 1% to forecast at the 4% range.