Veros Real Estate Solutions has announced its VeroFORECAST real estate market forecast for the 12-month period ending June 1, 2013. Released quarterly, the report shows that the housing market’s gradual recovery on a national level is steadily building. The forecast for the next 12 months on a national basis is improving significantly from last quarter's 0.85-percent forecast depreciation to the current forecast depreciation of 0.26 percent. Thus, from a national standpoint, the next 12 months are forecast to be flat.
Drags on the housing market have significantly declined with some markets starting to emerge for the first time with noteworthy appreciation. This includes some regions that have historically struggled through the recession and are now expected to grow from negative territory into the single digits.
“Overall, the gradual recovery in the housing market is forecast to continue from the previous quarter. VeroFORECAST is showing that many markets are expected to experience signs of appreciation even in some of the previously hard hit markets,” said Eric Fox, vice president of statistical modeling, analysis and research.
Phoenix is again predicted to be the top performing market with a forecasted 6.4 percent appreciation. The continued growth is based on the drastically reduced housing supply, which has plummeted by more than 70 percent from its peak, as well as greater affordability and low interest rates which are creating demand. The low supply and high demand of housing in the Phoenix area helped it to retain its top spot. Additionally, the region is benefitting from a lower unemployment rate at 7.4 percent, which continues to drop, as compared to a national rate of 8.1 percent. Phoenix’s number one ranking in the first quarter of 2012 surprised the industry as this metro had not previously been in the range of top 10 VeroFORECAST housing markets.
The Reno-Sparks region in Nevada has moved into the bottom spot of the housing market with a projected depreciation of five percent, down from 4.7 percent depreciation in the previous quarter. Pressure on pricing comes from an unemployment rate of 11.5 percent and stubbornly high housing inventory in conjunction with high foreclosure and mortgage delinquency rates.
The Projected Five Strongest Markets
►Phoenix-Mesa-Scottsdale, Ariz. 6.4%
►Boise City-Nampa, Idaho 3.8%
►Boulder, Colo. 3.6%
►Bismark, N.D. 3.5%
►Denver-Aurora, Colo. 3.3%
The Projected Five Weakest Markets
►Reno-Sparks, Nev. -5.0%
►Fresno, Calif. -4.9%
►Bakersfield, Calif. -4.7%
►Modesto, Calif. -4.6%
►Stockton, Calif. -4.3%
Regions that are experiencing the most strength in their housing markets include Texas, Colorado, and the Great Plains, including North Dakota, South Dakota, Nebraska and Oklahoma. Specific markets showing particular stability include Houston, Austin, and Dallas in Texas, as well as Denver and Boulder in Colorado. Low unemployment rates and housing supply, as well as robust economies, are common factors in these cities.
Although Florida still hasn’t made it into the list of top five markets many areas are showing signs of recovery and is being led by Tampa Bay with a forecast appreciation slightly less than this quarter’s fifth ranked market. Additionally, the Washington, D.C. metro area is also forecast to do well due to the stability of the local economy.
Inland California and Nevada markets continue to struggle and make up eight of the 10 bottom markets. These regions have battled against extremely high unemployment, foreclosure and mortgage delinquency rates that have kept any chance of recovery at bay. Atlanta, Chicago and Philadelphia are major metropolitan areas that are not expected to fare well in the coming year.
“We are definitely seeing a flattening for the first time in years at a national level instead of overall depreciation, which is a positive sign that the anticipated recovery is upon us,” said Fox.
