Veros: Home Price Appreciation Steady
Veros Real Estate Solutions, Santa Ana, Calif., said average projected appreciation rate for residential real estate in the nation’s 100 largest markets should hold steady at 3.7 percent through June 2020, maintaining the same rate from the previous quarter’s forecast and marking a leveling out after a four-quarter decline from a projected appreciation rate of 4.5 percent a year ago.
The VeroFORECAST said 5 percent of markets are projected to depreciate over the upcoming year, a figure that has remained the same since fourth quarter 2018, after it jumped from 3 percent in a single quarter.
“This flattening indicates that although there is definite softness overall in the housing market the fundamentals are healthy,” said Eric Fox, Veros Vice President of Statistical and Economic Modeling. “One potential contributing factor we saw in the models is some softening of mortgage interest rates, which is helping to prop up values and stem the decline.”
The current report is based on data from 343 Metropolitan Statistical Areas that include 13,719 zip codes, 987 counties, and represent 82 percent of U.S. residents. It projects the top five markets for appreciation in the next 12 months include Odessa, Texas (9.7%); Coeur D’Alene, Idaho (9.5%); Idaho Falls, Idaho (9.4%); Boise, Idaho (9.1%); and Midland, Texas (8.0%). Bottom five markets include Grand Forks, N.D. (-1.9%); Bridgeport, Conn. (-1.7%); Baton Rouge, La. (-1.6%); Lafayette, La. (-1.2%) and Norwich, Conn. (1.0%).
The report said average forecast appreciation for the Top 10 markets is expected to be 8.3 percent, up slightly from +7.9 percent a quarter ago. The Northwest continues to dominate the highest appreciating markets, with Idaho and Washington each holding four of the Top 10 spots and Texas with two.
Veros noted Indiana, Michigan and Ohio also showed strength, with average statewide appreciation for all three expected to be 5.0 percent. Arizona, too, is forecast to do uniformly well, with Phoenix, which dropped out of last quarter’s Top Ten, expected to top 7.0 percent and Tucson starting to show signs of strength along with the smaller markets of Prescott and Sierra Vista, all projected to exceed +6.0 percent.
Louisiana is forecast to do uniformly poorly, with four of its MSAs among the Bottom 10 markets. Connecticut and Arkansas each contribute two markets to the Bottom Ten, with the remaining two Bottom Ten markets located in North Dakota and Illinois.
The nation’s largest market, New York-northern New Jersey-Long Island, is expected to remain very soft through May 2020. What is driving metro real estate values lower, according to the forecast data, are large areas within the New York City boroughs as well as several markets in northern New Jersey. Manhattan, for instance, continues to be forecast with depreciation of -2.5 percent. Across New Jersey the average appreciation is only 1.7 percent.
