Veros Forecasts Nation's 10 Strongest and Weakest Markets
Jan 14, 2008
Proven forecasting technology indicates some markets still have strong home price appreciation
Santa Ana, CA - January 14, 2008 - Veros Real Estate Solutions has released some results of the company's quarterly review of their forecasts for the nation's residential real estate markets. Covering the period from December 1, 2007 through December 1, 2008, the numbers reflect both the current and anticipated prospective impact of the current mortgage credit "crisis." Veros has been developing and releasing these quarterly forecasts for nearly five years, with the first forecast report released in October 2003.
VeroFORECAST Strongest Five Markets
- Wichita, KS: +4%
- Raleigh/Cary, NC: +3%
- Sioux Falls, SD: +3%
- Fargo, ND: +3%
- Tulsa, OK: +3%
VeroFORECAST Weakest Five Markets
- Modesto, CA: -15%
- Riverside/San Bernardino, CA: -15%
- Palm Bay/Melbourne/Titusville, FL: - 14%
- Cape Coral/Ft. Myers, FL: -13%
- Sacramento/Roseville, CA: -12%
"We've been releasing results over the past five years, in both up and down markets," Darius Bozorgi, president and CEO for Veros explained, "and our models are consistently accurate in both. Our models forecast market swings and changes better than any product on the market."
The forecasts, based upon the VeroFORECAST models, reflect projected market gains and declines for single family residences in most major metropolitan areas and some non-metro areas, reflecting 75 percent of the nation's population. These forecasts are not based on a single variable. Veros applies more than 50 factors in its analytics to develop these trends, including interest and unemployment rates, inflation, current housing inventory and other economic and geographic factors. This contributes to making VeroFORECAST results the most accurate forecasts in residential real estate markets.
The predicted five strongest markets are Wichita, Kansas, up four percent; Raleigh/Cary, North Carolina, Sioux Falls, South Dakota, Fargo, North Dakota, and Tulsa, Okalahoma, all up three percent.
The predicted five weakest markets are where the greatest impacts occur. Each reflect double-digit declines and represent some of the nation's largest population areas. These markets are: Sacramento/Roseville, California, down 12 percent; Cape Coral/Ft. Myers, Florida, down 13 percent; Palm Bay/Melbourne/Titusville, Florida, down 14 percent; and the Riverside/San Bernardino and Modesto, California markets are both down 15 percent.
The heavy decline in the coastal markets, California and Florida, is due to the extended time properties remain on the market, combined with the excess residential inventory much of which is in condominium projects purchased speculatively. Also contributing to this decline is the need of sellers to dispose of their properties by lowering prices, often more than once.
The central part of the nation has thus far been largely unaffected by the rapid price appreciations that were seen in many other geographic areas. Consequently, this region is moving forward without distress from the depreciation felt elsewhere and is experiencing minor growth.
Veros uses two metrics to validate their models. R-squared measures how well any forecast model predicts an actual market change; an R-squared score of 1.0 indicates a perfect forecast, whereas an R-squared of 0.0 reflects no predictive capability in the model. The "Veros R-squared" is consistently in the 60 - 75 percent range.
The second metric is Mean Absolute Error; this measures the "typical error" in the model, where smaller is better. Typical error ranges for the Veros forecast are in the 2.5 percent to 5 percent range, well below that of their competitors' efforts. These two metrics demonstrate that Veros is able to produce a forecast that is more accurate than their competitors. In business, having accurate data in hand often means the difference between profit and loss.
"If you're looking for an accurate market forecast - consistently accurate - year after year, you're looking for VeroFORECAST," Eric Fox, vice president of Technology for Veros, adds. "Ours are the only models with consistent, proven track records."
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, California. To order the VeroFORECAST update or receive information on other Veros analytic products and systems, visit www.veros.com or call (866) 458-3767.