Veros Real Estate Solutions reports residential market values will continue their upward trend during the next 12 months, though the pace of acceleration is slowing.
The annual forecast from its most recent VeroFORECAST shows values are expected to decrease modestly to +3.5 percent following the prior quarter’s projection of +4.2 percent. The percentage of markets forecast to appreciate is holding steady at 92 percent.
VeroFORECAST is a quarterly national real estate market forecast for the 12-month period ending June 1, 2017. It indicates a significant weakening in the Bay area, with strength showing in Boston.
“Our Q2 VeroFORECAST still shows general market strength for the U.S. residential real estate market, but the slight softening we saw in last quarter’s report has continued,” Veros Statistical and Economic Marketing Vice President Eric Fox said in the company’s news release. “This weakening is being driven by some specific markets which are experiencing sharp increases in housing inventory. Examples include the San Francisco Bay Area where appreciation is forecast to be 7 percent over the next 12 months, a figure which is down significantly from previous double-digit appreciation forecasts. Likewise, many Texas markets such as Midland, Odessa, El Paso, and San Angelo are forecast to be flat or depreciate slightly due to continued softness in oil-based economies.”
The top forecast markets are showing appreciation in the 10 percent to 11 percent range, with the Pacific Northwest and Colorado having a lock on the 8 of the top 10 forecast markets. These markets have robust economies, growing populations, and no more than a two month’s supply of homes. Significantly notable is the forecast strengthening of the Boston market, which is up sharply to +7.4 percent because of reductions in inventory and unemployment.
The worst performing market is expected to be Kingston, N.Y., with forecast 2.5 percent depreciation. The other bottom five markets include Ocean City, N.J. (-2.1 percent), Kingsport, Tenn. (-1.9 percent), and both Atlantic City, N.J., and San Angelo, Texas, with forecast depreciation at -1.4 percent. The majority of the markets within the bottom 25 are depreciating less than 1 percent, indicating the market is in a generally stable place.