National Real Estate Forecast Holds Steady; Recovery Still on the Horizon
Jun 16, 2011
Santa Ana, Calif. – June 16, 2011 – Veros Real Estate Solutions (Veros), an industry leader in enterprise risk management and collateral valuation services, has announced the real estate market forecast for June 1, 2011 through June 1, 2012. According to data calculated by Veros’ real estate market forecast product, VeroFORECAST, Bismarck, North Dakota is in the lead position for the strongest home price appreciation due to an increase in population trends, as well as decreasing unemployment and interest rates.
Nationally, several sectors of the Great Plains, such as Oklahoma, Texas, Louisiana, Wyoming, South Dakota and North Dakota, remain the overall strongest and biggest housing areas of the U.S. Larger metro areas in Alaska and Hawaii are also forecast to remain strong.
Projected Five Strongest Markets*
- Bismarck, ND 3.8%
- Wichita Falls, TX 2.6%
- Buffalo/Niagara Falls, NY 2.1%
- Honolulu, HI 2.0%
- Anchorage, AK 1.9%
Projected Five Weakest Markets*
- Deltona/Daytona Beach/Ormond Beach, FL -6.7%
- Reno/Sparks, NV -6.0%
- Ocala, FL -5.8%
- Portland/Beaverton, OR/Vancouver, WA -5.6%
- Tampa/St. Petersburg/Clearwater, FL -5.5%
Veros’s 12-month forecast indicates that the national housing market is steadily correcting itself and showing some signs of strength. The company’s national home price index has continued to oscillate around 1.0 percent since the third quarter in 2010, pointing to a prolonged recovery.
“The good news is that the 13- to 24-month market forecast is looking strong for core housing markets. Additionally, there are not any significant drags remaining on the home price index … or any extreme double-digit depreciation,” said Eric Fox, vice president of statistical and economic modeling for Veros.
“However, since none of the markets are forecast to jump back to a strong appreciation in next few months, the home price index needs to be at 0 percent for the return of overall average appreciation, the recovery is anticipated to be very slow.”
According to VeroFORECAST’s report, housing supply is a key variable in only one of the top 10 housing markets. In these particular markets, the average unemployment rate is 6.2 percent compared to the national unemployment rate at 9.11 percent, meaning that loans for housing are more accessible to residents. Additional positive key variables for the top 10 markets include population trends, unemployment rate, interest rates and inflation.
“Overall, four percent appreciation in certain sectors is as good as it will get for now. Likewise, five or six percent is about as weak as it is expected to get. There is not a danger of returning to the double-digit declines of the past,” said Fox.
Although several of the hardest hit markets are starting to recover, they are still not going to be a strong market in today’s housing environment. Florida and Nevada continue to lead the weakest markets with six of the 10 struggling sectors. The Pacific Northwest (Oregon and Washington) have three of bottom markets that are continuing to feel pressure to housing over-supply and unemployment.
VeroFORECAST uses advanced analytics and micro-market data to achieve highly accurate results, and is utilized by economists, statisticians and business leaders as a key resource for forecasting and strategic planning due to its consistent strength and accuracy over the past eight years.
*Markets demonstrated are for residential real estate in major metro areas (typically greater than 500,000 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. To order the VeroFORECAST update or receive information on other Veros analytic products and systems, visit www.veros.com or call (866) 458-3767.
VeroFORECAST provides forecasts on the national real estate market with the capacity to segment results by property types, by three distinct pricing tiers – upper, middle and entry-level – and by metro area, county or zip code. The forecast utilizes more than 50 critical decisioning factors in its forecast analytics to develop reliable market trend predictions covering more than 900 counties, more than 300 metro areas and nearly 14,000 zip codes. Key factors range from interest, unemployment and inflation rates, to housing inventory levels and an array of economic and geographic trends. Veros engineered VeroFORECAST in response to demand for more focused and useful reports featuring improved methods and emphasizing more localized data in its analytics.
About Eric Fox
Eric Fox is the vice president of statistical and economic modeling with Veros Real Estate solutions. He has more than 24 years of industrial experience in statistical and econometric modeling, probabilistic life methodology development, statistical training, probabilistic design software development, and probabilistic financial/competitive analysis. A published author of more 20 technical papers on probabilistic and statistical methods in various industry publications, Fox received his Master of Science in statistics and bachelor’s degree in mathematics and economics from Purdue University.
Forecasts Available for Additional U.S. Markets Upon Request