Veros Real Estate Solutions has announced its VeroFORECAST real estate market forecast for the 12-month period ending Sept. 1, 2013. Released quarterly and covering 918 counties, 305 metro areas, and 12,985 zip codes, the report shows that the housing market’s gradual recovery on a national level has picked up measurable speed. The forecast for the next 12 months has improved significantly on a national basis, from last quarter's 0.26-percent forecast depreciation to the current forecast appreciation of 1.1 percent. The five projected strongest markets have seen a great deal of progress, thanks mainly to decreased housing supply and the continuing low interest rates.
The five projected weakest markets are doing far better than in last quarter’s forecast, as well. Nationally, the next 12 months are forecast to continue the trend of improvement.
Atop the list of strongest markets once again, Phoenix metro gained 1.9 percent from the previous quarter’s +6.4 percent forecast appreciation figure to its current forecasted +8.3 percent.
“Phoenix has benefited from a drastically reduced housing supply, which has plummeted by over 70 percent 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 percent. These factors, combined with the prevailing low interest rates, set the stage for Phoenix to be our top performing market."
On the opposite end of the spectrum, Atlantic City, N.J. emerged as the weakest market. The positive news here is that at -4.3 percent, the weakest market in this report is somewhat improved from last quarter’s weakest, which registered -5 percent. Also, in the previous report, all the remaining areas in the bottom five were in California; none of those areas appear among the weakest five in this forecast report.
“Atlantic City unemployment is at a high 13 percent 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 three percent."
Projected Five Strongest Markets
1. Phoenix-Mesa-Scottsdale, Ariz. +8.3%
2. Midland, Texas +7.5%
3. Boise City-Nampa, Idaho +6.5%
4. Miami-Fort Lauderdale-Miami Beach, Fla. +6.5%
5. Denver-Aurora, Colo. +6.0%
Projected Five Weakest Markets
1. Atlantic City, N.J. -4.3%
2. Poughkeepsie-Newburgh-Middletown, N.Y. -3.3%
3. Rockford, Ill. -2.7%
4. Norwich-New London, Conn. -2.7%
5. Allentown-Bethlehem-Easton, Pa.-N.J. -2.7%
Key factors for all of these markets are unemployment rates and housing inventory; where unemployment remains at or above the national average, markets tend to suffer with unsold homes and depressed demand. In many markets seeing easing in unemployment, housing inventories are being absorbed and prices are responding.
“Things are improving in all aspects,” said Fox. “In last quarter’s forecast, the bottom five were in the -5.0 percent to -4.3 percent range, and now they are in the -4.3 percent to -2.7 percent range, representing a marked strengthening. The numbers are showing us that the stronger markets are continuing to gather steam and the weaker markets are showing continual improvement.”