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How Is The Market Really Doing?

Veros Real Estate Solutions (Veros), an award-winning industry leader in enterprise risk management, collateral valuation services, and predictive analytics, has released its second quarter 2018 VeroFORECAST, which predicts that over the next 12 months residential market values will appreciate at a national average of +4.4%, a slightly higher rate than predicted in the previous report.

Each quarter Veros releases a new VeroFORECAST report, developed by projecting the impact of various key predictors on real estate values at four future time horizons: 6, 12, 18 and 24 months. The report released today, which covers the 12 months from June 1, 2018 through June 1, 2019, integrates data from 1,005 counties, 354 metropolitan statistical areas (MSAs), and 13,877 zip codes that cover 82% of the U.S. population.

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“Washington State and Nevada occupy six of the ten highest-appreciating MSAs in the U.S. and the remaining four are in California, Oregon and Idaho,” said Eric Fox, VP of Statistical and Economic Modeling at Veros. “This is the 24th quarter in a row where this index has forecast overall appreciation. Interestingly, the metro markets that are projected to appreciate the most over the next 12 months in this VeroFORECAST release are also among the most populated, while the markets that are expected to depreciate most are all among the least populated. For example, the average population of the top 25 metros is 1.7 million and the average population of the bottom 25 metros is 318,000.”

The new report reconfirms what has been experienced over the last several years: high demand for housing and historically low housing supply remain the key determinants of where any given market is expected to be on the appreciation-depreciation spectrum.

There is also a geographical component to real estate appreciation predictions. Not only are the projected top ten trending U.S. markets, as determined in the current VeroFORECAST, concentrated in the West, but the ten that are predicted to depreciate slightly or remain the same, are in the East and South.

For the 12 months beginning June 1, 2018, Veros predicts all ten of the highest-appreciating MSAs and 21 of the top 25 markets will be in seven contiguous far west states, from Washington and Idaho in the north, down through Oregon and California, and east to Nevada, Utah and Colorado.

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“There are several factors driving up home prices in the Seattle area, including a thriving economy and a lack of buildable land,” said Economist Matthew Gardner, with Seattle-based Windermere Real Estate. “There is also growing demand for housing thanks to the substantial in-migration of technology workers from the Bay Area who are relocating to Seattle because of the robust job market and relatively inexpensive home prices when compared to those in San Francisco,” Gardner concluded.

Despite migration to Seattle from California’s Bay Area and Silicon Valley, the San Jose market is one of the top five markets for appreciation this quarter, ranked fourth at +9.5 percent.

“The San Jose market remains exceedingly strong with a supply of homes at an extremely low 1.0 months, while its population is continuing to grow steadily. Its unemployment is an extremely low 2.6%. The Silicon Valley continues to attract workers for high tech jobs, and there isn’t enough housing to fill demand, making this one of the strongest markets in the country,” Fox said.

Much like San Jose, this quarter’s fourth highest appreciating market Reno-Sparks is experiencing extremely low housing inventories in conjunction with rapidly growing population.

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“For at least eight years now Reno-Sparks has been experiencing incredible growth, with an influx of companies in the technology space from California and other states,” said Craig King, TITLE, Chase International. “Tesla is currently building a 14 million-plus square foot gigafactory here, which, upon completion, is expected to be the biggest building in the world. With so many people moving into the area from higher equity regions, there is a great deal of pressure on the housing market to catch up and builders are still under building. This phenomenon has been going on for at least 5 to 6 years now and we are still 20,000 housing units behind what’s needed,” King concluded.

The supply of homes in Reno is 2.7 months and continues to fall. Combined with an unemployment rate of a low 3.8% and rapid population growth of 15%+, this is one of the forecast’s strongest markets in the country.

Nearly one-half of the bottom 25 markets are in the northeastern states of New Jersey, Connecticut, New York, Maine, Pennsylvania and Maryland, with eight others in the deep south: Louisiana, Alabama, Arkansas and Mississippi.

Among the ten MSAs projected to have the highest depreciation over the next 12 months, only three were in the previous VeroFORECAST bottom ten, and the rate of depreciation is significantly less. In the last report, Atlantic City was predicted to depreciate at nearly 3%, and it now is forecast to depreciate at -1.0%. Cumberland, Maryland-West Virginia MSA, which was not among the bottom ten MSAs in the last report, now has the worst forecast depreciation, albeit only -1.6%.

About The Author

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.

Partnership Provides AVM And eValuation Services

Veros, a developer of enterprise risk management, collateral valuation, and predictive analytics services, has partnered with Valligent, an innovator in non-traditional appraisals and appraisal review services, to provide a complete solution in collateral valuation and analytics that will enable lenders to cut costs and increase operational efficiency.

The companies’ services will be integrated through VeroPRECISION, the AVM decisioning product Veros introduced last October. VeroPRECISION uses sophisticated data analysis to first determine a subject property’s suitability for an automated valuation model (AVM). Independent testing shows that, while 70% to 80% of property valuations are best handled by AVMs, the balance require hands-on analysis through an alternative, such as a desktop, drive-by, or traditional appraisal.

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The 20% to 30% of subject properties determined more appropriate for an alternative to an AVM can be automatically forwarded to Valligent, which will provide a desktop valuation performed by one of its own highly trained analysts or appraisers, based on each client’s pre-determined preferences.

In cases where VeroPRECISION instantly deems a property appropriate for AVM valuation, those customers will immediately receive one of the industry’s top performing AVMs chosen specifically for the particular subject property. Based upon machine learning in a production environment, the VeroPRECISION decision engine determines the most accurate valuation at the subject property level. Unlike traditional cascade approaches that employ county level look-up tables, VeroPRECISION makes its AVM determinations at the specific property level.

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Integrating Veros and Valligent technology is expected to be of special interest to home equity lending, where HELOCs have grown as a share of lending business in recent years.

“With rising home prices increasing the amount of available equity, and rising mortgage rates making a new purchase less attractive, homeowners are increasingly choosing to remain in and remodel their homes,” said Robert Walker CMB, CMT Vice President of Sales at Veros. “By partnering with Valligent, we have given VerosPRECISION a seamless, integrated fulfillment process that takes it far ahead of any other AVM service.”

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“This is much more than a one-stop service that covers valuation reports for the full spectrum of home equity lending needs,” added Jeremy McCarty, Valligent CEO and chief valuation strategist. “It’s also a way for lenders to ensure that their valuation processes are fully compliant with all of the related regulations.”

The VeroPRECISION Valuation Decision Engine is available through VeroSELECT, Veros’ vendor-agnostic, single-enterprise management platform, which provides access to a comprehensive suite of innovative collateral risk solutions from 10 vendors designed to help lenders best assess collateral values at origination and across existing portfolios. In addition to VeroPRECISION and the VeroVALUE suite of valuation products, VeroSELECT offers AVM Cascade Management, VeroBPO Broker Price Opinions, VeroPHOTO Plus: Property Condition Reports, and its proprietary, best-in-class valuation forecasting tool, VeroFORECAST.

 

About The Author

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.

VeroFORECAST Reveals A Record Breaker

Veros Real Estate Solutions (Veros) 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.

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.

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“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.”

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. “

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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.

“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.”

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“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.”

US Housing Market Outlook Q1 2018: VeroFORECAST Predictions

Helping Lenders Comply With 2018 Regulation

Veros, a provider of data, analytics and technology for the mortgage banking industry, has developed a solution for lenders specializing in PACE (Property Assessed Clean Energy) loans in the state of California, where new compliance requirements went into effect on January 1, 2018.

VeroPACE, available through the VeroSELECT ordering platform, will generate, analyze, rank, and report the multiple Automated Valuation Models (AVMs) now required for PACE lending by California State Assembly Bill 1284 and the companion State Senate Bill 242.

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“The passage of this legislation significantly changed the valuation process for PACE loans, which are used to finance greater energy efficiency in homes,” said Veros VP of Sales Rob Walker. “Historically lenders could process a PACE loan in California using the results of a single AVM, but they now need three AVMs and must use a new method of calculating the final value.”

AB 1284 intends to enhance PACE underwriting by requiring lenders to obtain the three AVMs from a third-party vendor, then choose the one with the highest confidence score and calculate the midpoint of that AVM’s high-low value range. The resulting value, combined in a report with data from the three AVMs, becomes the valuation submitted with the PACE loan application.

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“Ordering three AVMs on the same property can be difficult,” Walker added. “And because different AVM providers have different methods of producing confidence scores and values, the mid-range requirement has presented some significant challenges for many PACE lenders. Also, if lenders cannot get three AVMs, they have to get an appraisal, which will add time and cost to the loan application process. To combat this, lenders need to achieve high AVM hit rates.”

“The good news for PACE lenders who are struggling with this new compliance requirement is that VeroPACE handles the entire process for them,” said Luke Ziegenmeyer, Director of Product Management at Veros. “And, if need be, we have an optional add-on for VeroPACE users that can facilitate the request and delivery of appraisals as well.”

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When VeroPACE is ordered through the VeroSELECT platform, a single data call is made, which generates a “cascade” through which up to 10 AVMs may be run to increase the likelihood of getting a hit. The VeroSELECT system stops requesting AVMs once it has received three valid hits. VeroPACE then determines the AVM with the highest confidence score, calculates the average of its high and low values, and returns it to the lender in a standardized data format. VeroPACE also generates a coversheet with all the data elements that can be put in a file of supplemental information.

About The Author

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.

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.”

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.

VeroFORECAST_Strongest_Weakest_Markets-Dec2015_Dec2016

Enhancing Valuation Management

Veros has completed enhancements to VeroSELECT. The enhancement allows for the integration of two existing tools, VeroBPO and VeroPHOTO Plus, directly into VeroSELECT’s fully transparent collateral risk management platform. Here’s what the enhancements accomplish:

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Designed to deliver maximum valuation insights with quick and intuitive access to critical valuation tools, the new interface lets users order broker price opinions (BPOs) and property condition reports (PCRs) directly from VeroSELECT’s multifunctional interface. Users can also continue to run models from Veros’ flagship AVM, VeroVALUE, or any of the industry’s other top-performing AVMs. The system’s efficiency and intuitive logic make it possible to manage transactional and portfolio AVM strategies as well as design AVM cascades ranging from straight-forward to highly sophisticated. Complemented by self-service administration and centralized reports, VeroSELECT’s interface is highly intuitive, and requires very little training.

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“VeroSELECT has been considered one of the most stable and versatile valuation management platforms available in the marketplace,” comments David Rasmussen, senior vice president of operations for Veros. “The enhanced VeroSELECT gives access to a menu of valuation tools available from one centralized interface and maintains the platform’s ability to cater to the power valuation users who require complex AVM cascade logic with real-time data access.”

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The enhanced VeroSELECT upholds Veros’ commitment to comprehensive compliance and audit controls through all system and product applications. Known within the industry for its superior system uptimes, speed, transparency and overall reliability, VeroSELECT is a reliable enterprise platform that quickly delivers an extensive range of critical valuation data.
 
Monitored 24 hours a day, 365 days a year, Veros’ colocation facilities are in multiple U.S. regions, each with fail-over capability and data redundancy. Veros uses a comprehensive framework to protect information, operations, and assets against natural or man-made threats, and its systems are compliant with SSAE 16, NIST-800-53, and FISMA audits. “The valuations provided are one critical part of the equation for our customers,” concludes Rasmussen, “but where VeroSELECT stands apart is through the strength, consistency, and security of Veros’ underlying technology.”

Veros Releases Housing Forecast

Veros released its most recent VeroFORECAST, a quarterly national real estate market forecast for the 12-month period ending December 1, 2016.

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The VeroFORECAST report indicates residential market values will continue their overall upward trend during the next 12 months, with overall annual appreciation rising to +4.4% (from its Q3-2015 forecast of +3.6%) with 94% of markets forecast to appreciate. “Our current VeroFORECAST update continues to show increasing strength for the next year and above last quarter’s update,” says Eric Fox, VP of Statistical and Economic Modeling at Veros.

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“However in the 13 to 24 month forecast window, we expect the rate of appreciation to slow down with this forecast period expecting only +2.3% appreciation. The primary driver for this weakening can be attributed to tightening already begun by the Fed which is likely to cause mortgage interest rates to begin ticking upward. We don’t see dramatic increases in interest rates or a repeat of 2007 price declines. At this point, it simply looks like a slowing of the increase in house prices as we get into well into 2016 and 2017.”

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“The top forecast markets are all showing appreciation in the 10% range with the Pacific Northwest getting very hot,” continues Fox. “Portland, Seattle, and Bend are numbers 1, 2, and 4 in the nation, respectively. Denver and San Francisco continue to be strong as well rounding out the Top 5. Most of these markets have strong economies, growing populations, and month’s supply of homes around 2.0 months or less. With these conditions, it is difficult for these markets to do anything other than appreciate at a good clip. Oregon, Washington, and North Carolina showed the biggest gains in one-year forecast levels from last quarter’s update. Top performing markets continue to confine themselves to California, Colorado, Florida, Washington, and Oregon which comprise 21 of the Top 25 forecast markets.”

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The forecast bottom markets are expected to be in the eastern portion of the U.S. New Jersey, Connecticut, parts of New York, West Virginia, Alabama, and parts of Pennsylvania account for well over half of the bottom 25 markets. However even these expected poorest performing of markets are only expected to depreciate slightly or be flat.

New Electronic Appraisal Delivery Tool Emerges

Veros Real Estate Solutions (Veros), an enterprise risk management, collateral valuation services and predictive analytics provider, has launched the new “Preview” feature for Electronic Appraisal Delivery (EAD) portal submission to FHA. This preview is available through the firm’s proprietary connection to EAD known as PATHWAY, a technology already actively submitting appraisals to the portal well in advance of the FHA mandate.

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This feature is specifically focused on helping FHA lenders conduct their appraisal quality control checks earlier in the loan endorsement process. The EAD Preview functionality is similar to that which Veros offers through its platforms for Uniform Collateral Data Portal (UCDP) appraisals, but is specific to the warnings and hard stops published by FHA. Technology vendors can also adopt Veros’ reliable system-to-system connections to facilitate previews and submissions on behalf of their FHA lender customers.

“Early adoption for both the submission process as well as a quality control process, such as PATHWAY’s ‘Preview’, is critical for a smooth transition into EAD,” states Chuck Rumfola, senior vice president of strategic operations for Veros. “The industry lived through a similar transition in the adoption of the Uniform Appraisal Dataset and UCDP requirements for the GSEs just over five years ago, but it’s important we don’t lose site that FHA is a different entity with its own requirements and has a unique operational process. We must also bear in mind how swiftly the June 27th mandate will be upon us.”

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Technology solutions such as that provided by Veros are making it easier for lenders and technology providers to make the necessary connections to both EAD and UCDP in a single solution. Adding functionality early in the loan manufacturing process to quickly detect and resolve issues specific to investor or insurer policies drives better all-around loan quality and streamlines deliveries into the secondary market. Pathway allows stakeholders to manage these deliveries on one platform regardless of a loan’s ultimate destination. Veros provides its proven support in managing all integrations to secondary market systems so Pathway customers have one less item to worry about.

Veros is at the forefront of the industry in regard to its secondary market portal submission capabilities as the first technology firm to establish a complete integration to EAD and the first to provide a complete Preview. The firm is also the technology provider selected by Fannie Mae and Freddie Mac to design, build and maintain the UCDP and was similarly selected by FHA to design, build and manage EAD. Veros offers its own proprietary system solutions separate and apart from these systems, and in a highly integrated, reliable and secure environment.

Veros Data Looks At The State Of The Market

Now in its 15th year, Veros Real Estate Solutions (Veros), a provider of enterprise risk management, collateral valuation services and predictive analytics, forecasts the vitality and expected market changes of the U.S. residential market for 2016. The company released its most recent VeroFORECAST, a quarterly national real estate market forecast for the 12-month period ending December 1, 2016.

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The VeroFORECAST report indicates residential market values will continue their overall upward trend during the next 12 months, with overall annual appreciation rising to +4.4% (from its Q3-2015 forecast of +3.6%) with 94% of markets forecast to appreciate. “Our current VeroFORECAST update continues to show increasing strength for the next year and above last quarter’s update,” says Eric Fox, VP of Statistical and Economic Modeling at Veros. “However in the 13 to 24 month forecast window, we expect the rate of appreciation to slow down with this forecast period expecting only +2.3% appreciation. The primary driver for this weakening can be attributed to tightening already begun by the Fed which is likely to cause mortgage interest rates to begin ticking upward. We don’t see dramatic increases in interest rates or a repeat of 2007 price declines. At this point, it simply looks like a slowing of the increase in house prices as we get into well into 2016 and 2017.”

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“The top forecast markets are all showing appreciation in the 10% range with the Pacific Northwest getting very hot,” continues Fox. “Portland, Seattle, and Bend are numbers 1, 2, and 4 in the nation, respectively. Denver and San Francisco continue to be strong as well rounding out the Top 5. Most of these markets have strong economies, growing populations, and month’s supply of homes around 2.0 months or less. With these conditions, it is difficult for these markets to do anything other than appreciate at a good clip. Oregon, Washington, and North Carolina showed the biggest gains in one-year forecast levels from last quarter’s update. Top performing markets continue to confine themselves to California, Colorado, Florida, Washington, and Oregon which comprise 21 of the Top 25 forecast markets.”

The forecast bottom markets are expected to be in the eastern portion of the U.S. New Jersey, Connecticut, parts of New York, West Virginia, Alabama, and parts of Pennsylvania account for well over half of the bottom 25 markets. However even these expected poorest performing of markets are only expected to depreciate slightly or be flat.