Veros: U.S. Real Estate Appreciation to Continue Throughout 2020
Veros Real Estate Solutions, Santa Ana, Calif., said its fourth quarter VeroFORECAST data project home prices in the nation’s 100 largest markets to increase by nearly 4 percent through December.
Veros Vice President of Statistical Modeling Eric Fox said the forecast is slightly higher than the rate predicted in the first three quarters of 2019, closing the year with moderate home-price growth.
“The sound fundamentals of the economy, low interest rates and strong levels of employment should result in moderate home-price appreciation with very few geographic pockets of weakness,” Fox said.
Veros said the 10 markets forecasted to increase the most between this year are primarily located in the Pacific Northwest (Washington, Oregon and Idaho) and the West (Arizona and Utah), with one outlier in Georgia. “The defining factor in the strongest markets is a very low housing supply which is forcing prices to increase much more rapidly than in other markets,” Fox said.
The top 10 markets:
1 Spokane, Wash., 10.1%
2 Boise, Idaho, 9.5%
3 Idaho Falls, Idaho, 8.4%
4 Longview, Wash. 8.2%
5 Kennewick, Wash. 8.0%
6 Phoenix, 7.1%
7 Gainesville, Ga., 6.9%
8 Eugene-Springfield, Ore., 6.7%
9 Provo-Orem, Utah, 6.7%
10 Olympia, Wash., 6.5%
The forecasts reported only Monroe, La., is expected to decline. Connecticut has three cities in the bottom group; Illinois also has three, California has two and one metropolitan area in Alabama rounds out the 10 least-performing markets:
1 Monroe, La., -0.5%
2 Bridgeport, Conn., 0.6%
3 Chicago, 0.7%
4 Torrington, Conn., 1.0%
5 Dothan, Ala., 1.0%
6 Bloomington, Ill., 1.1%
7 Santa Cruz, Calif., 1.2%
8 Champaign, Ill., 1.3%
9 Santa Rosa-Petaluma, Calif., 1.3%
10 Hartford, Conn., 1.4%
The report said the $10,000 cap on the state and local tax deduction, known as SALT, has softened markets where these taxes are high and growth is stagnant such as New York, New Jersey and Connecticut. California, also hampered by SALT and has seen some recent out-migration, continues to struggle compared to the years when home prices there were growing by double-digit percentages year over year.
Earlier this week, CoreLogic, Irvine, Calif., said home prices increased nationally by 3.7% from a year ago; on a month-over-month basis, prices increased by 0.5% from October.
CoreLogic said home prices continue to increase on an annual basis with the CoreLogic HPI Forecast indicating annual price growth of 5.3% through November 2020. On a month-over-month basis, the forecast calls for home prices to increase by 0.2% from through December, which would mark a new peak in prices since the last U.S. recorded peak in April 2006.