While many housing markets continue to struggle with declining home values and foreclosures, Veros Real Estate Solutions is beginning to predict price appreciation across the U.S.

The VeroForecast for the 12-month period ending Sept. 1 has the research firm predicting 1.1% home price appreciation nationwide. The forecast covers 918 counties, 305 metro areas and approximately 12,985 ZIP codes.

Metros like Phoenix are considered stronger today with Veros expecting the metro to experiance a 1.9%-gain in its forecasted appreciation rate of 8.3%, up from 6.4% in the prior quarter.  

"Phoenix has benefited from a drastically reduced housing supply, which has plummeted by over 70% from its peak," said Eric Fox, Veros' vice president of statistical modeling, analysis and research. 

"The area continues its trend of remaining well below the nation's 8.1% average for unemployment, with a jobless rate of 7.2%. These factors, combined with the prevailing low interest rates, set the stage for Phoenix to be our top performing market."

Cities that remain weak include Atlantic City, N.J., which has a forecasted depreciation rate of 4.3%.

"Atlantic City unemployment is at a high 13% and housing inventory remains stubbornly high as well," said Fox. "This, in conjunction with high foreclosure and mortgage delinquency rates, is keeping pressure on pricing in this market. Moreover, the population in the last decade has dropped almost 3%."

Projected Five Strongest Markets*                                           

  1. Fargo, ND-Minn.: 3.5%
  2. Bismarck, ND:  3.3%                                                              
  3. Washington-Arlington-Alexandria, D.C.-VA-MD-WV: 2.9%                
  4. Honolulu, HI: 2.8%                                                                     
  5. Anchorage, AK: 2.1%                                                                   

Projected Five Weakest Markets*                                             

  1. Bakersfield, Calif.: -6.8%
  2. Reno/Sparks, NV.: -5.7%
  3. Las Vegas/Paradise, NV.: -5.3%
  4. Sacramento-Arden-Arcade-Roseville, Calif.: -5.2%
  5. Fresno, Calif.: -5.2%