The latest VeroFORECAST report, released in September for third quarter 2018, projected changes in real estate values for 358 Metropolitan Statistical Areas over the next 12 months. Of them, 351 are predicted to go up in value, with the seven atop the rankings forecast to have increases of more than 10%.

The seven at the bottom, however, are forecast to drop in value between -0.2% and -2.2%.

The full range of criteria that goes into these forecasts includes employment, population growth, interest rates and housing supply, just to mention a few.

Of these criteria, housing supply and population are the two that most separate the top ten markets from the bottom ten.

The markets predicted to appreciate significantly – topped by Bremerton-Silverdale, Washington, with a projected rate of 11.7% – have very low supplies of available housing.

Those markets with the lowest – or negative – rates of appreciation show indications of high supplies of for-sale properties over the next 12 months.

Regarding populations, the average in the bottom 25 metros is 304,000 compared with an average of 1.2 million in the top 25 MSAs.

Looking up, looking down

Overall, we forecast an appreciation rate of 4.5% for the 100 most populous MSAs, another tenth of a percent hike over the previous quarter's findings. And more than 98% of those 358 MSAs are expected to go up in value by at least a fraction of a percent.

That's little comfort to those seven metros at the bottom of the list with projected depreciation and the bottom ten's other three MSAs, where the prediction is for appreciation at 0.2% or 0.3%.

All seven MSAs with predicted depreciation are in five states (New Mexico, New Jersey, Illinois, Connecticut and Arkansas) and just adding Louisiana covers the entire bottom ten MSAs.

Here are the new report's bottom 10 projected markets through August 2019:

  1. Farmington, NM...................................................................... -2.2%
  2. Vineland-Millville-Bridgeton, NJ........................................... -1.6%
  3. Danville, IL.............................................................................. -1.2%
  4. Peoria, IL................................................................................. -0.7%
  5. Ocean City, NJ ......................................................................... -0.4%
  6. Texarkana, TX-Texarkana, AR............................................... -0.2%
  7. Torrington, CT........................................................................ -0.2%
  8. Shreveport-Bossier City, LA.................................................... 0.2%
  9. Bridgeport-Stamford-Norwalk, CT........................................ 0.2%
  10. Bloomington-Normal, IL ........................................................ 0.3%

A low pair

The two MSAs with the worst outlook for property values over the year ahead are Farmington, New Mexico, and Vineland-Millville-Bridgeton, New Jersey, with -2.2% and -1.6%, respectively.

Farmington, New Mexico, one of only three bottom ten MSAs west of the Mississippi, is suffering through 4.7% unemployment, above the national average of 3.9%. Its population is down 10% over the last six years, adding to demand sluggishness.

In Vineland, New Jersey, the population has been flat for the past six years. Its housing supply is in excess of six months and its unemployment rate is well above the national average, at a whopping 6.5%. This is causing Vineland, and New Jersey in general, to have a poor forecast for the next year.