Residential real estate market values will continue their upward trend over the next 12 months, however at a slower pace of acceleration, according to Veros Real Estate Solutions, which specializes in enterprise risk management, collateral valuation services and predictive analytics.
The annual forecast is expected to decrease to 3.5% from last quarter’s projected 4.3%, while the percentage of markets forecasted to appreciate is unwavering at 92%.
This insight comes from the company’s most recent VeroFORECAST, a quarterly national real estate market forecast for the 12-month period ending June 1, 2017.
“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,” said Eric Fox, Veros vice president of statistical and economic modeling. “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% over the next 12 months, a figure which is down significantly from previous double-digit appreciation forecasts,” Fox said. “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 show appreciation in the 10% to 11% range. The top forecast market is Seattle, Washington at 11.2%, followed by Portland, Oregon at 11.1% and Denver, Colorado at 9.9%.
These economies have robust economies, growing populations and no more than two month’s supply of homes. In fact, the forecast of the Boston market increase sharply to 7.4% due to reductions in inventory and unemployment.
On the other hand, the worst performing market us Kington New York with 2.5% depreciation, followed by Ocean City, New Jersey at -2.1%, Kingsport, Tennessee at -1.9% and Atlantic City, New Jersey and San Angelo, Texas tied at -1.4%.
The worst performing markets will only depreciate between 1% and 2%. In fact, the majority of the markets within the bottom 25 are depreciating less than 1%, indicating the market is in a generally stable place, according to the report.