As the housing market makes serious strides toward recovery, that progress is marked by the continued performance of individual metros nationwide. And now, 83% of these markets have a favorable outlook for home price appreciation over the next year, according to the latest predictive analytics from Veros Real Estate Solutions.
Veros, which also provides risk management and collateral valuation services, says in its latest 12-month forecast that the percentage of markets expected to increase in value has grown to 83% from last quarter’s 80%. In another measured improvement from the previous quarter, Veros also found an accompanying decrease in the last quarter’s depreciating markets from 20% to 17%.
The insight is product of the company’s most recent VeroFORECAST, a national real estate market predictor for the 12-month period ending September 1, 2015. Updated quarterly, the system covers 1,026 counties, 352 metros and 13,904 zip codes.
While the national forecast anticipates 2.4% annual appreciation, VeroFORECAST expects a rate of 2.5% for the country overall. And although this recent reading marks the ninth consecutive quarter in which the index has shown forecast appreciation, the pace has continued to slow down.
The trend is mostly about housing supply, says Eric Fox, Veros’ vice president of statistical and economic modeling and developer of VeroFORECAST.
“Not unexpectedly, prices will rise where supplies are low,” he said in a written statement. “In the bottom forecast markets, declining population trends are a key variable for the sixth straight quarter. Populations follow jobs, and housing supplies are often slow to keep pace with demand supported by increased employment for a variety of reasons.”
Unofficially, the demarcation between the top-25 best and weakest forecasted markets appears to be the Mississippi River, according to Fox.
“All of the Top 25 markets are west of the Mississippi and, with the exception of Hot Springs, Arkansas, the entire Bottom 25 group is found east of the river,” said Fox in a written statement. “Of course, that does not mean that all of the markets in the west are appreciating, nor does it mean all those in the east are experiencing depreciation.”
Among the strongest forecasted markets for price appreciation over the next 12 months are Victoria, TX (9.8%); Houston-Sugar Land-Baytown, TX (9.7%); San Jose-Sunnyvale-Santa Clara (9.6%); Austin-Round Rock, TX (9.5%) and San Francisco-Oakland-Fremont, CA (9.4%).
At the opposite end of the spectrum, the weakest markets projected for declines include Atlantic City, NJ (3.3%); Sheboygan, WI (2.7%); Lima, OH (2.4%); Jacksonville, NC (2.3%); and Fond Du Lac, WI (2.3%).
View Vero’s top strongest and weakest forecasted markets.
Written by Jason Oliva