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The Best And Worst Real Estate Markets Are …

Veros Real Estate Solutions (Veros), a provider of enterprise risk management, collateral valuation services and predictive analytics, reports that residential market values will continue their overall upward trends during the next 12 months, with overall annual forecast appreciation of +4.2% which is higher than last quarter’s forecast appreciation of +4.0%. And, only 3% of markets are expected to depreciate, which is the same as last quarter’s forecast.

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This insight comes from the company’s most recent VeroFORECAST, a quarterly national real estate market forecast for the 12-month period ending December 1, 2018.

“Our Q4 VeroFORECAST is continuing to show the market as very strong for the overall U.S. residential real estate market,” says Eric Fox, VP of Statistical and Economic Modeling at Veros. “Washington State is set to boom– occupying all of the Top 5 market spots. This has never happened before with one state occupying all of the top positions. Seattle is #1 with expected appreciation of over 12% followed by other Washington markets of Bellingham, Bremerton, Kennewick, and Mount Vernon all near 10%. These markets show no signs of letting up as supply of homes is exceedingly low and population continues to grow.”

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Fox continues, “Metro areas in Colorado, Idaho, Oregon, and Washington comprise the remaining metro areas in the Top 10. If you want strong appreciation, move to the Northwest portion of the U.S. “

Conversely, 12 of the bottom 25 markets are in the Northeastern states of Connecticut, New Jersey, Maine, West Virginia, Maryland, Pennsylvania, and New York. Bangor, Maine is forecast to be the worst performing market with 2.0% depreciation with the markets of Bridgeport, Longview, Vineland, and Atlantic City forecast to have approximately 1.0% depreciation over the coming year.

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“Unfortunately, the fundamentals of these markets remain static with flat or declining populations and relatively high unemployment rates,” Fox explains. “These factors contribute to a high housing supply with low demand that are unlikely to change anytime soon.”

“Some interesting trends are also emerging with this forecast. Parts of California are starting to see an uptick in forecast appreciation with top performing markets such as San Diego, San Jose, Los Angeles, and Sacramento expected to have appreciation from 7.5% to 8.0% which is up from 6.5% to 7.5% from the last update.” Fox continues, “Also, many Texas markets are softening with Dallas and Austin losing 1% in forecast appreciation since the last update.”

Don’t Count On Home Appreciation

Veros says that approximately 80 percent of the country’s real estate markets are forecast to appreciate in value during the next 12 months while 20 percent are forecast to experience depreciation, and all but the most upbeat markets are slowing in their value improvements. This insight is from the company’s VeroFRECAST national real estate market forecast for the 12-month period ending June 1, 2015, updated quarterly and covering more than 1,000 counties, 340 metro areas, and 13,770 zip codes.

Northern California metro areas lead the rest of the country, while markets in parts of Illinois, New Jersey and Pennsylvania are forecast to be among the poorest performers. Veros’ future home price index (HPI) forecast indicates that, on average for the top 100 metro areas, Veros expects 2.5 percent appreciation over the next 12 months, down from last quarter’s 3.4 percent forecast. This is the eighth consecutive quarter where the index has shown forecast appreciation, but the pace has continued to slow down, according to Eric Fox, Veros’ vice president of statistical and economic modeling and developer of VeroFORECAST.

“San Jose housing supplies are down and San Francisco is seeing a serious housing shortage,” says Fox. “Inventories in both are down 70 percent from their peak in 2008 and demand is outstripping supply, leading to price run-ups and decreased affordability despite low interest rates,” he says. “There just aren’t enough houses available that people can afford to buy, so those that remain are hotly contested.”

The Bottom Five markets have seen slight softening, VeroFORECAST notes. In the previous quarter’s update, the weakest market, Atlantic City, New Jersey, tracked at -2.5 %, faring better than this quarter’s weakest, Rockford, Illinois, at -3.4%. “Rockford real estate is experiencing hard times, going from -2.6% to -3.4% in a single quarter,” Fox says. “The culprit is its 10.4 percent unemployment rate coupled with a flat population growth trend. These are familiar and persistent themes among the weakest markets. In summary, we are still seeing good appreciation in the top markets, but there is definite slowing overall,” he says.

About The Author

[author_bio]

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Don’t Count On Home Appreciation

Veros says that approximately 80 percent of the country’s real estate markets are forecast to appreciate in value during the next 12 months while 20 percent are forecast to experience depreciation, and all but the most upbeat markets are slowing in their value improvements. This insight is from the company’s VeroFRECAST national real estate market forecast for the 12-month period ending June 1, 2015, updated quarterly and covering more than 1,000 counties, 340 metro areas, and 13,770 zip codes.

Northern California metro areas lead the rest of the country, while markets in parts of Illinois, New Jersey and Pennsylvania are forecast to be among the poorest performers. Veros’ future home price index (HPI) forecast indicates that, on average for the top 100 metro areas, Veros expects 2.5 percent appreciation over the next 12 months, down from last quarter’s 3.4 percent forecast. This is the eighth consecutive quarter where the index has shown forecast appreciation, but the pace has continued to slow down, according to Eric Fox, Veros’ vice president of statistical and economic modeling and developer of VeroFORECAST.

“San Jose housing supplies are down and San Francisco is seeing a serious housing shortage,” says Fox. “Inventories in both are down 70 percent from their peak in 2008 and demand is outstripping supply, leading to price run-ups and decreased affordability despite low interest rates,” he says. “There just aren’t enough houses available that people can afford to buy, so those that remain are hotly contested.”

The Bottom Five markets have seen slight softening, VeroFORECAST notes. In the previous quarter’s update, the weakest market, Atlantic City, New Jersey, tracked at -2.5 %, faring better than this quarter’s weakest, Rockford, Illinois, at -3.4%. “Rockford real estate is experiencing hard times, going from -2.6% to -3.4% in a single quarter,” Fox says. “The culprit is its 10.4 percent unemployment rate coupled with a flat population growth trend. These are familiar and persistent themes among the weakest markets. In summary, we are still seeing good appreciation in the top markets, but there is definite slowing overall,” he says.

About The Author

[author_bio]

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Home Price Appreciation May Slow

Veros says that the residential real estate market has crested after almost two straight years of rapidly increasing appreciation.  This insight is from the company’s VeroFORECAST national real estate market forecast for the 12-month period ending March 31, 2015, updated quarterly and covering more than 1,000 counties, 345 metro areas, and 13,770 zip codes.

Veros’ future home price index (HPI) forecast indicates that, on average for the top 100 metro areas, Veros expects 3.4 percent appreciation over the next 12 months, down from last quarter’s 5.1 percent forecast, which may very well have been the peak for the national outlook.  This is the seventh consecutive quarter where the index has shown forecast appreciation.  While the market is expected to be healthy overall, the level of forecast appreciation is definitely slowing, according to Eric Fox, Veros’ vice president of statistical and economic modeling and developer of VeroFORECAST.

“The wave of appreciation may have crested, but it has been an impressive recovery in many respects,” says Fox.  “The market is stabilizing and the overall outlook is very positive,” he notes.  “However, we won’t see the rapid gains we have experienced in prior quarters.  Those days appear to be behind us for the foreseeable future.”

The stabilizing trend is expected to last over the next two years, Fox adds. “We are seeing continued signs that a year or two from now the rapid increase of prices will slow in many parts of the country.  Importantly, we don’t foresee drastic slowing – simply some moderation.  The primary reason for some slowing in the 13 to 24 month range is due to expected higher interest rates and somewhat lower affordability,” he explains.  “The average national forecast for the next 12 months is 3.4 percent, and the average forecast for the following 12 months (months 13-24) is only 2.0 percent,” Fox says.

Projected Five Strongest Markets

1. San Jose-Sunnyvale-Santa Clara, CA             +9.7%
2. Los Angeles-Long Beach-Santa Ana, CA         +9.3%
3. Midland, TX                                                          +9.3%
4. Bismark, ND                                                           +9.1%
5. San Francisco-Oakland-Fremont, CA              +8.8%

Projected Five Weakest Markets
1. Atlantic City, NJ                                      -2.5%
2. Norwich-New London, CT                       -1.7%
3. Fayetteville, NC                                       -1.6%
4. Rockford, IL                                              -1.6%
5. Winston-Salem, NC                                  -1.6%

Home Appreciation To Slow

Veros found that while residential real estate appreciation trends continue to march up steadily, the previously rapid acceleration of values is starting to slow down. This insight is from the company’s VeroFORECAST real estate market forecast for the 12-month period ending December 31, 2014, updated quarterly and covering more than 1,000 counties, 345 metro areas, and 13,770 zip codes.

Veros’ future home price index (HPI) forecast indicates that, on average for the top 100 metro areas, Veros expects 5.1 percent appreciation over the next 12 months, up from last quarter’s 4.8 percent forecast. This is the sixth consecutive quarter where the index has shown forecast appreciation.

“The future HPI forecast continues to show good appreciation, but the markets appear to be topping out for now,” said Eric Fox, Veros’ vice president of statistical and economic modeling and author of VeroFORECAST. “The continued appreciation demonstrates the overall health of the real estate market, but it is important to note that this is just a slight increase from last quarter’s national forecast, indicating much slowing in the forecasted rate of increase. Currently, most areas in the country are expected to see price appreciation with few areas forecast to show declines.” Fox added that the split is slightly over 90% for markets with appreciation compared to a bit under 10% in depreciation.

“All markets in the Top 5 now have strong appreciation forecasts, although they are weaker overall than last quarter’s top markets, which topped at 15 percent. Moreover, although depreciating markets are still present, they are all exhibiting small depreciation trends such as -1% or -2%,” Fox noted.

The CA Market Leads The Way Back

*The CA Market Leads The Way Back*
**New Data Emerges**

california***Veros has announced that San Francisco and other metro areas in California are poised for the country’s strongest levels of appreciation in the coming year. The forecast also reports select markets in the Northeast will continue depreciation trends, though these trends are lessening. This is the conclusion of the company’s VeroForecast real estate market forecast for the 12-month period ending June 1, 2014, updated quarterly and covering 969 counties, 324 metro areas, and 13,502 zip codes.

****Veros’ future home price index (HPI) forecast continues to show significant strengthening and improvement across the nation, particularly in the west, including Texas. The HPI indicates that, on average for the top 100 metro areas, Veros expects 3.1 percent appreciation over the next 12 months. This is the fourth consecutive quarter where the index has shown forecast appreciation. In a dramatic improvement, most areas of the country are now expecting to see appreciation with far fewer areas showing price declines. As of this forecast update, nearly 90 percent of U.S. markets are expected to see appreciation, while the remaining markets (approximately 10 percent) are expected to experience declining home prices. This is a highly positive national trend given last quarter’s split at 75% of markets appreciating and 25% of markets depreciating.

****Projected Five Strongest Markets

****1. San Francisco-Oakland-Fremont, CA +12.7%

****2. Los Angeles-Long Beach-Santa Ana, CA +11.6%

****3.  San Jose-Sunnyvale-Santa Clara, CA +11.1%

****4.  Midland, TX +11.1%

****5. Phoenix-Mesa-Scottsdale, AZ +10.9%

****Projected Five Weakest Markets*

****1. Poughkeepsie-Newburgh-Middletown, NY -2.9%

****2. Kingston, NY -2.1%

****3. Norwich-New London, CT -1.9%

****4. Bridgeport-Stamford-Norwalk, CT -1.8%

****5. Atlantic City, NJ -1.6%

****Essentially, all markets in the top 5 positions now have double-digit forecast appreciation, with the re-emergence of California markets taking over three of the top 5 spots.

****San Francisco is experiencing a serious housing shortage, with supply down nearly 80% from its peak in 2008. Although prices are still relatively expensive compared with much of the U.S., affordability is back to 2004 levels. This low supply, historically good affordability, relatively low unemployment of 6.7% (compared to the 7.5% national unemployment rate) and continued low interest rates are propelling this market to the #1 spot with 12.7% appreciation forecast. Similarly, the Los Angeles and San Jose market upswings are about the significantly reduced housing supply, down more than 70% and 75% respectively from their peaks. In Los Angeles, affordability is back at levels not seen in more than a decade and the low unemployment rate in San Jose are positioning these markets in the #2 (+11.6%) and #3 (+11.1%) spots respectively.

****Moving out of California, Midland, Texas and Phoenix round out the list of VeroFORECAST’s anticipated strongest markets with 11.1% forecast appreciation and 10.9% appreciation, respectively. Both markets have made regular appearances on the top 5 list and demonstrate consistent strength. “It’s encouraging to see steadily rising appreciation expectations,” commented Eric P. Fox, vice president of statistical and economic modeling for Veros. “What we are seeing now indicates a return to a healthy market with improvements appearing in a conservative yet correcting manner.”

****Florida, Washington, Colorado, North Dakota, and Idaho are looking particularly strong as well. Although not making it into the top 10, Houston, Austin, and Dallas are expected to fare well also, and Boston is finally positioned for recovery.

****On the other end of the spectrum, New York, New Jersey and Connecticut occupy this quarter’s bottom 5 markets as the anticipated weakest market areas. In Poughkeepsie and Kingston, New York, as well as Norwich and Bridgeport, Connecticut metros, unemployment rates are proving to be a significant driver, keeping each of these markets moving in a downward trend. Interestingly, a few of these markets are also being strongly influenced by population trends, where either the area’s population has declined or remained flat, and as a result, lack the demand associated with an influx of new residents to motivate housing turn-over and, ultimately, the growth that tends to accompany healthier housing markets.

****Atlantic City takes the fifth position on VeroForecast’s bottom 5 list at -1.6%. Although it is still ranked as one of the nation’s weaker markets, residents should be encouraged by the upswing from last quarter’s -4.2% forecast, which was driven by high mortgage delinquencies and unemployment rates.

****The majority of the poor performing markets are primarily in the Northeast portion of the country, with parts of Connecticut and New Jersey expected to fare poorly relative to the remainder of the U.S. Pockets of the South are also forecast to be weak, especially Mississippi and Alabama, along with areas of South Carolina.

****“Overall, the recovery in the housing market is forecast to continue to accelerate and quite significantly over the previous quarter,” said Fox. “We have been consistent in our position over the past year that the recovery will be lengthy and gradual, which it has been, while many were talking about ‘shadow inventory’ pulling the housing market back down and creating another recession.  Now we are finally over the hump with appreciation being the forecast norm,” he noted. “Although strong appreciation is expected for months 13 to 24 in the forecast, it is not as strong as in months 1 to 12. That is to say, we are seeing the first signs a year or two from now that the rapid increase of prices will slow a bit in many parts of the country. However, we don’t foresee drastic slowing – simply some moderation.” Fox said.