Veros: Residential Markets to Continue Upward Trend in 2016
Veros Real Estate Solutions, Santa Ana, Calif., said residential market values should continue their overall upward trend during the next 12 months, with overall annual appreciation rising to 44 percent, with 94 percent of markets forecast to appreciate.
Eric Fox, vice president of statistical and economic modeling with Veros, said the company’s quarterly VeroFORECAST continues to show increasing strength for the next year. However, he cautioned that in the 13-24 month forecast window, appreciation could slow to 2.3 percent.
“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,” Fox said. “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.”
The forecast said top markets generally show appreciation in the 10 percent range with the Pacific Northwest getting “very hot,” continues Fox. “Portland, Seattle and Bend [Ore.] 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.”
The forecast said Oregon, Washington and North Carolina showed 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’s bottom markets continue 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 more than half of the bottom 25 markets.
“However even these expected poorest performing of markets are only expected to depreciate slightly or be flat,” Fox said.
