Forecast: Home Appreciation Strongest in Washington, Nevada
Veros Real Estate Solutions, Santa Ana, Calif., projects seven of the top 10 appreciating home markets will be in Washington and Nevada over the next 12 months.
The company’s quarterly VeroFORECAST said average property value appreciation of 4.5%, with appreciation projected in 97% of metros analyzed and depreciation in only 3%, marking the 25th consecutive quarter of forecast appreciation.
“We are seeing consistency in nearly every metro market,” said Eric Fox, Vice President of Statistical and Economic Modeling with Veros.
The report said western states continue to hold all top 10 spots, with forecast appreciation rates running roughly between 9 and 12 percent. Seven of those metros with the highest-projected appreciation are in Washington and Nevada, with the other three in Idaho, California and Colorado. Another Western state, Utah, is also projected to be a solid performer. These five states, along with Oregon, have provided the index’s highest-ranked markets throughout 2018.
“This is a very strong showing, with the average appreciation of the Top 10 markets forecast to be a half-percentage point higher than in our last report,” Fox said. “From an overall perspective, the latest report signals ‘more of the same’ for property values in these markets. Furthermore, for many of the markets for which data was analyzed, interest rates appear to be softening this quarter’s forecasts by 1 to 2 percent over what they would have been had the flat interest rate environment of the past several years continued.”
The report said other regions had bright spots as well. North Carolina is projected to perform well, as are Michigan and Indiana, especially the Indianapolis-Carmel, Ind., where property values are projected to appreciate at 8.5 percent.
Illinois, however, is forecast to do very poorly, with three of its MSAs in the forecast’s bottom 10. Bloomington-Normal is forecast to appreciate at just 0.3 percent through next August, and Peoria and Danville are predicted to depreciate at -0.7 percent and -1.2 percent, respectively.
The report also noted in the South, Texas has healthy markets, notably Midland and Odessa, which show definite strengthening while others, such as Dallas and College Station, show definite slowing since last quarter’s report. And although the San Francisco-Oakland area ranks in the Top 10 with projected 9.6 percent appreciation, parts of California are beginning to show some signs of slowing down. San Jose, for example, is showing a projected appreciation rate dropping from double-digits to 8.3 percent over the next 12 months.
“Housing supply is a key discriminator between the forecasted top- and bottom-performing markets,” Fox said. “Where the housing supply is very low, as in our top markets, prices are expected to increase significantly. By contrast, for many of the bottom markets, which are in very slow growth metros, housing supply is projected to remain high.”
