VeroFORECAST Shows Significant Improvement in Home Price Index; Acceleration of Gradual Recovery
Mar 26, 2012
Phoenix’s housing market rebounds to top spot after being one of the hardest hit markets.
Green indicates Strongest 5 markets, Black indicates Weakest 5 markets
Santa Ana, Calif. – March 26, 2012 – Veros Real Estate Solutions (Veros), an industry leader in enterprise risk management, collateral valuation services and predictive analytics, has announced its VeroFORECAST real estate market forecast for the 12-month period from March 1, 2012 to March 1, 2013. The quarterly report shows that the recovery in the housing market is forecast to accelerate. The national home price index (HPI) forecast improved significantly from last quarter’s 1.3 percent depreciation to this quarter’s slight depreciation of 0.85 percent.
VeroFORECAST shows fewer significant drags across an increasing number of markets, many of which are beginning to emerge with initial signs of appreciation for the first time since the market’s decline. On a national level the gradual recovery in house prices is finally forecast to start accelerating, although the forecast projects the recovery to be market-by-market with not all areas expected to do well. Unemployment and housing supply remain key discriminators between the top and bottom 10 markets.
Phoenix is predicted by VeroFORECAST to be the top performing market with a forecasted five percent appreciation. Its revival is based on the drastically reduced housing supply, great affordability and low interest rates. Also creating demand is Phoenix’s 7.9 percent unemployment rate, which is less than the national rate of 8.3 percent.
For the third consecutive quarter, Bakersfield, Calif. stands at the bottom of the housing market with depreciation of 6.3 percent, which is a slight improvement from 6.8 percent in the previous quarter. Unemployment is at 14.3 percent and although housing inventory is coming down, the market is still experiencing a high rate of foreclosure and mortgage delinquency which continues to keep the pressure on pricing.
Projected Five Strongest Markets*
- Phoenix-Mesa-Scottsdale, AZ +5.0%
- Bismarck, ND +4.3%
- Shreveport-Bossier, LA +3.4%
- Anchorage, AK +3.1%
- Fargo, ND-MN +2.7%
Projected Five Weakest Markets*
- Bakersfield, CA -6.3%
- Modesto, CA -4.9%
- Fresno, CA -4.9%
- Reno-Sparks, NV -4.7%
- Stockton, CA -4.7%
The strongest areas in the United States can be still be found in the Great Plains, including regions in North Dakota, Texas, South Dakota, Nebraska, and Louisiana. Housing markets that continue to perform well and see improvement include regions in Washington D.C., Hawaii, and Alaska. Although not ready yet ready to crack the top ten, hard hit housing markets in Florida are starting to see signs of appreciation.
Inland California and Nevada markets make up seven of the top bottom 10 markets. Recoveries in these areas will be a long time in coming due to extremely high unemployment rates that vary between 11 and 16 percent, as well as high foreclosure and mortgage delinquency rates. Additionally, Chicago, Philadelphia and Seattle are three big cities not expected to fare well in the next year.
*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.