Veros Sees U.S. Real Estate Appreciation Up 3.7% by Q3 2020

Veros Real Estate Solutions, Santa Ana, Calif., released its third quarter forecast, project average appreciation rate for residential real estate in the nation’s largest 100 housing markets to increase by 3.7 percent through September 2020, unchanged from the first and second quarters this year.

“Home price growth in 2020 will be slow and steady,” said Eric Fox, Veros Vice President of Statistical and Economic Modeling. “Despite some clear headwinds facing the economy next year, housing fundamentals will prevail. While we won’t experience a boom, we aren’t going to go bust, either.”

Veros said its forecast for the 10 strongest markets between Q3 2019 and Q3 2020 show most in just three states, Washington, Idaho and Texas. Fox said the defining factor in the strongest markets is very low housing supply, which is forcing prices to increase much more rapidly than other markets.

1          Kennewick-Pasco-Richland, Wash., 8.6%

2          Boise City-Nampa, Idaho, 8.5%

3          Pocatello, Idaho, 8.3%

4          Odessa, Texas, 8.2%

5          Idaho Falls, Idaho, 8.2%

6          Spokane, Wash., 7.4%

7          Yakima, Wash., 7.2%

8          Phoenix-Mesa-Glendale, Ariz., 6.8%

9          Bellingham, Wash., 6.7%

10        Midland, Texas, 6.6%

Veros noted the top 10 MSAs are only separated by just 2 percentage points. The forecast showed just four depreciating markets over the next 12 months:

1          Kokomo, Ind., -0.9%

2          Grand Forks, N.D., -0.7%

3          New Haven-Milford, Conn., -0.1%

4          Cape Coral-Fort Myers, Fla., -0.1%

The forecast said of note, Midwestern states are positioned to have solid, above-average appreciation in the 4% to 5% range for many major markets in Indiana, Michigan, Ohio and Kentucky. Illinois remains the exception as the only Midwestern state not expected to fare well.

Veros said California continues to report sluggish growth for the next 12 months, with nearly all major markets in the state are expected to appreciate only in the 2% to 3% range, including cities that used to lead the national growth trajectory including Los Angeles, San Diego, San Francisco and San Jose. “Considering the average increase for the year is expected to be 3.7%, projections in those cities is definitely below average,” Fox said.