Veros Real Estate Solutions revealed quarterly data that proves the housing recovery is moving full steam ahead going into the second quarter of 2013.
From March 2013 to March 2014, Veros expects to see 2.2% price appreciation. This is the third consecutive quarter where the index has shown forecast appreciation.
This quarter’s data predicts that 75% of U.S. markets are expected to see appreciation, while 25% of the markets may experience a decline in home prices.
The strongest projected markets are Los Angeles-Long Beach-Santa Ana, Calif. (+11.8%); San Francisco-Oakland-Fremont, Calif. (+11.3%); Phoenix-Mesa-Scottsdale, Ariz. (+10.8%); San Jose-Sunnyvale-Santa Clara, Calif. (+10.5%) and Midland, Texas (+9.9%).
The five weakest projected markets are Atlantic City, N.J. (-4.2%), Poughkeepsie-Newburgh-Middletown, NY (-3.0%), Gulfport-Biloxi, MS (-2.3%), Pascagoula, MS (-2.2%) and Deltona-Daytona Beach-Ormond Beach, FL (-2.1%).
As of this quarter’s update, California markets made up seven of the top 10 forecast strongest markets.
“This is the first time in a long time that California markets are forecast to do so well,” said Eric Fox, vice president of statistical and economic modeling for Veros.
In fact, the Los Angeles market is predicted to be the nation’s top performer for the next 12-month period, with an upswing stemming from a significantly reduced housing inventory, which has dropped more than 70% from its 2007 peak.
“Housing supply is a key differentiator between our top and bottom forecast performing markets,” said Fox. “The majority of the poor performing markets are primarily in the Northeast portion of the U.S. and we’re seeing pockets of the South that are forecast to be weak, especially Mississippi and Alabama.”
Fox added that the recovery in the housing market is accelerating significantly compared to the previous quarter.
“We have consistently said that the recovery would be lengthy and gradual over the past year, which it has been, while many others have been focused on the shadow inventory pulling the housing market back down and creating another recession. Now we are finally over the hump, with appreciation being the forecast norm and with fewer markets forecast to show signs of weakness. The number of ‘weak’ markets is now consistent with what we would consider to be a healthy and recovering market,” he said.