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The COVID-19 pandemic caused plenty of housing uncertainty, though the industry has remained resilient throughout it. Current home prices are a prime example of that as Veros Real Estate Solutions' VeroForecast data indicates the average projected appreciation rate for residential properties in 100 of the largest housing markets across the country has rebounded.
"With some exceptions, the vast majority of housing markets remain strong and resilient in contrast to the crash they fueled over a decade ago," said Darius Bozorgi, CEO of Veros Real Estate Solutions. "This is a testament to the programs and policies implemented in the wake of the Great Recession. During this tragic pandemic, the current state of the housing market is proving to be a stalwart for the U.S. economy."
Veros explored home price data as it relates to a number of economic factors, including employment trends, which were heavily impacted by COVID-19. The report revealed that while unemployment numbers are still high, job losses were not consistent across the country. In fact, some areas have rebounded even stronger than initial forecasts.
"This quarter’s forecast indicates significant home price appreciation from what we just experienced in the first quarter of 2020," said Eric Fox, Veros vice president of statistical and economic modeling. "Despite the devastating economic, social and health impact resulting from COVID-19, the overall average annual appreciation rate increased to 3.5% vs. 1.9% from the annual forecasted rate last quarter."
Historically low interest rates will help to stimulate demand to push prices up, according to Veros. Despite the decline in housing demand with buyers be a bit more cautious, housing supply has been reduced in many markets. As a result, there is less inventory for buyers to choose from.
Veros also forecasted the 10 strongest markets over the next 12 months. The top five includes Boise, Idaho; Spokane-Spokane Valley, Washington; Idaho Falls, Idaho; Olympia-Lacey-Tumwater, Washington and Sierra Vista-Douglas, Arizona. The Top 5 least performing markets over the next 12 months include Chicago-Naperville-Elgin, Illinois, Indiana, Wisconsin; Bridgeport-Stamford-Norwalk, Connecticut; Baton Rouge, Louisiana; Naples-Marco Island, Florida, and Victoria, Texas.
"During the second quarter, in the wake of pandemic induced stay-at-home orders and business shutdowns across the country, it was made clear that home was the only safe place to be," said Bozorgi. "Government programs, such as forbearance, are providing more options for homeowners to stay in their home despite record unemployment and economic uncertainties and we remain cautiously optimistic about the future state of housing."
Click here to read more from the VeroFORECAST report.