Press
20% of nation’s homes now depreciating, according to Veros’ 12-month forecast update for third quarter 2014
SANTA ANA, CA (July 15, 2014) — Veros Real Estate Solutions (Veros), an industry leader in enterprise risk management, collateral valuation services and predictive analytics, says that approximately 80 percent of the country’s real estate markets are forecast to appreciate in value during the next 12 months while 20 percent are forecast to experience depreciation, and all but the most upbeat markets are slowing in their value improvements. This insight is from the company’s VeroFORECAST national real estate market forecast for the 12-month period ending June 1, 2015, updated quarterly and covering more than 1,000 counties, 340 metro areas, and 13,770 zip codes.
Northern California metro areas lead the rest of the country, while markets in parts of Illinois, New Jersey and Pennsylvania are forecast to be among the poorest performers. Veros’ future home price index (HPI) forecast indicates that, on average for the top 100 metro areas, Veros expects 2.5 percent appreciation over the next 12 months, down from last quarter’s 3.4 percent forecast. This is the eighth consecutive quarter where the index has shown forecast appreciation, but the pace has continued to slow down, according to Eric Fox, Veros’ vice president of statistical and economic modeling and developer of VeroFORECAST.
“San Jose housing supplies are down and San Francisco is seeing a serious housing shortage,” says Fox. “Inventories in both are down 70 percent from their peak in 2008 and demand is outstripping supply, leading to price run-ups and decreased affordability despite low interest rates,” he says. “There just aren’t enough houses available that people can afford to buy, so those that remain are hotly contested.”
The Bottom Five markets have seen slight softening, VeroFORECAST notes. In the previous quarter’s update, the weakest market, Atlantic City, New Jersey, tracked at -2.5 %, faring better than this quarter’s weakest, Rockford, Illinois, at -3.4%. “Rockford real estate is experiencing hard times, going from -2.6% to -3.4% in a single quarter,” Fox says. “The culprit is its 10.4 percent unemployment rate coupled with a flat population growth trend. These are familiar and persistent themes among the weakest markets. In summary, we are still seeing good appreciation in the top markets, but there is definite slowing overall,” he says.
Projected Five Strongest Markets*
- San Jose-Sunnyvale-Santa Clara, CA +10.6%
- San Francisco-Oakland-Fremont, CA +10.5%
- Austin-Round Rock, TX +10.0%
- San Diego-Carlsbad-San Marcos, CA +9.0%
- Houston-Sugar Land-Baytown, TX +8.9%
Projected Five Weakest Markets*
- Rockford, IL -3.4%
- Trenton-Ewing, NJ -2.9%
- Scranton-Wilkes-Barre, PA -2.6%
- Poughkeepsie- Newburgh-Middletown, NY -2.5%
- Atlantic City, NJ -2.2%
*Markets demonstrated are for residential real estate in major metro areas (typically greater than 250,000 residents) among single-family homes in the median price tier.
About Veros Real Estate Solutions
Veros Real Estate Solutions, a proven leader in enterprise risk management and collateral valuation services, uniquely combines the power of predictive technology, data analytics and industry expertise to deliver advanced automated decisioning solutions. Veros products and services are optimizing millions of profitable decisions throughout the mortgage industry, from loan origination through servicing and securitization. Veros provides solutions to control risk and increase profits including automated valuations, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is headquartered in Santa Ana, Calif. For more information, please visit www.veros.com or call (866) 458-3767.
About Eric Fox, VP of Statistical and Economic Modeling:
Eric Fox received his M.S. in Statistics and B.S. in Mathematics and Economics from Purdue University, and has more than 22 years of industrial experience in statistical and econometric modeling, probabilistic life methodology development, statistical training, probabilistic design software development, and probabilistic financial/competitive analysis. Fox has published more than 20 technical papers on probabilistic and statistical methods.
Additional forecasts for other U.S. markets available to the press upon request.
Media Contact
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Strategic Vantage Marketing & Public Relations
(858) 774-0201 JimHennessy@StrategicVantage.com