Veros Real Estate Solutions has announced its VeroFORECAST real estate market forecast for the 12-month period from March 1, 2012 to March 1, 2013. The quarterly report shows that the recovery in the housing market is forecast to accelerate. The national home price index (HPI) forecast improved significantly from last quarter’s 1.3 percent depreciation to this quarter’s slight depreciation of 0.85 percent. VeroFORECAST shows fewer significant drags across an increasing number of markets, many of which are beginning to emerge with initial signs of appreciation for the first time since the market’s decline. On a national level, the gradual recovery in house prices is finally forecast to start accelerating, although the forecast projects the recovery to be market-by-market with not all areas expected to do well. Unemployment and housing supply remain key discriminators between the top and bottom 10 markets.
Phoenix is predicted by VeroFORECAST to be the top performing market with a forecasted five percent appreciation. Its revival is based on the drastically reduced housing supply, great affordability and low interest rates. Also creating demand is Phoenix’s 7.9 percent unemployment rate, which is less than the national rate of 8.3 percent.
For the third consecutive quarter, Bakersfield, Calif. stands at the bottom of the housing market with depreciation of 6.3 percent, which is a slight improvement from 6.8 percent in the previous quarter. Unemployment is at 14.3 percent and although housing inventory is coming down, the market is still experiencing a high rate of foreclosure and mortgage delinquency which continues to keep the pressure on pricing.
Projected Five Strongest Markets Forecast
►Phoenix-Mesa-Scottsdale, Ariz.: 5.0%
►Bismarck, N.D.: 4.3%
►Shreveport-Bossier, La.: 3.4%
►Anchorage, Alaska: 3.1%
►Fargo, N.D.-Minn.: 2.7%
Projected Five Weakest Markets Forecast
►Bakersfield, Calif.: -6.3%
►Modesto, Calif.: -4.9%
►Fresno, Calif.: -4.9%
►Reno-Sparks, Nev.: -4.7%
►Stockton, Calif.: -4.7%
The strongest areas in the United States can be still be found in the Great Plains, including regions in North Dakota, Texas, South Dakota, Nebraska and Louisiana. Housing markets that continue to perform well and see improvement include regions in Washington, D.C.; Hawaii and Alaska. Although not ready yet ready to crack the top 10, hard hit housing markets in Florida are starting to see signs of appreciation.
Inland California and Nevada markets make up seven of the top bottom 10 markets. Recoveries in these areas will be a long time in coming due to extremely high unemployment rates that vary between 11 and 16 percent, as well as high foreclosure and mortgage delinquency rates.
Additionally, Chicago, Philadelphia and Seattle are three big cities not expected to fare well in the next year.