Full Steam Ahead
Apr 10, 2013
Featuring Eric Fox, Vice President Statistical Modeling, Analysis & Research
Monthly Podcast Transcript - Duration: 5 minutes
Adrienne Ainbinder, Moderator: Welcome to the Veros Real Estate Solutions monthly podcast. Today we have Eric Fox back to talk about the latest Veros forecast housing market update. Eric of course is Veros’ Vice President of Statistical and Economic Modeling. Welcome back Eric.
Eric Fox: Well, thank you Adrienne, it’s good to be back and as we indicated three quarters ago the market has definitely hit bottom and is in full recovery mode and is accelerating.
Adrienne Ainbinder: Very good. So the big headline for this quarter’s update is that we are "moving full steam ahead." Now, that obviously sounds pretty good so tell me what you’re seeing the forecast.
Eric Fox: Well, overall the future HPI forecast is showing significant and strengthening improvement so as a matter of fact for our top hundred metropolitan areas we’re expecting to see 2.2 percent appreciation over the next 12 months so as I mentioned earlier that’s the third quarter in a row where the index has shown forecast appreciation and as a matter of fact more areas of the country are expected to see appreciation with far fewer showing price declines and the split seems to be about 75 percent of the markets with forecast appreciation and 25 percent with forecast depreciation so everything is looking pretty good now with the top markets and even those markets that are depreciating now are very minor depreciating so like -2, -3 percent so that’s about as bad as we’re seeing.
Adrienne Ainbinder: Now this quarter’s update also shows California coming back in a big way with three California markets appearing among the top five, and seven California markets among the top ten so what’s behind this momentum?
Eric Fox: Well, California really did vault to the top rather rapidly. Los Angeles and San Francisco are both expected to appreciate somewhere around 12 percent, they are our top two markets; San Jose at 11 percent comes in at number four and what we’re seeing there is really it’s about the reduced housing supply. All of Los Angeles, San Francisco and San Jose, the supply of housing in those markets is down between 70 and 80 percent from what it was at the peak of the downturn in the 2008 timeframe so we’re really seeing very little supply which of course in the face of increasing demand causes prices to go up.
Adrienne Ainbinder: Okay, well as a Californian I’m going to hope we continue to move in that direction. Tell me who else is looking good for the next 12-month period.
Eric Fox: Well, Phoenix still looks really good with appreciation over 10 percent forecast. Midland, Texas – rounds out our top five, again near 10 percent. And besides California, Arizona, and the Texas area we’re still seeing good strength in Florida, Colorado, North Dakota, and Idaho all look – look particularly strong. And for a couple of individual major markets Seattle and Detroit are starting to recover nicely.
Adrienne Ainbinder: We do always have to switch from the good news to the less-than-good news, but fortunately it looks like we don’t have to classify the bottom five markets as "bad news" so to speak, at least not compared to the recent years but do tell me about the weaker markets in this quarter’s update.
Eric Fox: Well, if we take a look at our five forecast worst performing markets, Atlantic City, New Jersey is our worst performing forecast market at -4.2 percent. Number two is Poughkeepsie, New York at -3; Gulfport-Biloxi is at -2.3 percent, Pascagoula, Mississippi at -2.2, and Daytona Beach, Florida at -2.1. And it’s interesting that the majority of the poor performing markets are primarily in the northeastern portion of the U.S. with pockets of the south also forecast to be fairly week such as Mississippi and Alabama.
Adrienne Ainbinder: In your professional opinion, now that it’s officially springtime and we’re moving into that part of year where people like to make their home moves, at a high level, what do you think this forecast for the quarter means for buyers and sellers?
Eric Fox: Well, that’s an interesting question because spring and summer typically are the strongest time of year and fall and winter typically are the weakest overall and with a lot of the acceleration in the pricing that we’re seeing I think what that’s going to cause is the spring summer season this year is going to be even stronger in many locales than is typically the case.
Adrienne Ainbinder: Very good. Well, for our listeners, additional information including the latest Veros forecast results and the top/bottom five markets can be found in our newsroom on veros.com. Please follow our Twitter handle @verosRES - for real estate solutions - for other breaking news as well. Eric, thanks so much for your time and for all the great info.
Eric Fox: All right, thank you.