Veros Releases Forecast Detail for 2016 Best & Worst Real Estate Metros
Jan 27, 2016
Now in its 15th year, Veros Real Estate Solutions (Veros), an award-winning industry leader in enterprise risk management, collateral valuation services and predictive analytics, forecasts the vitality and expected market changes of the U.S. residential market for 2016. The company released its most recent VeroFORECAST, a quarterly national real estate market forecast for the 12-month period ending December 1, 2016.
The VeroFORECAST report indicates residential market values will continue their overall upward trend during the next 12 months, with overall annual appreciation rising to +4.4% (from its Q3-2015 forecast of +3.6%) with 94% of markets forecast to appreciate. “Our current VeroFORECAST update continues to show increasing strength for the next year and above last quarter’s update,” says Eric Fox, VP of Statistical and Economic Modeling at Veros. “However in the 13 to 24 month forecast window, we expect the rate of appreciation to slow down with this forecast period expecting only +2.3% appreciation. The primary driver for this weakening can be attributed to tightening already begun by the Fed which is likely to cause mortgage interest rates to begin ticking upward. We don’t see dramatic increases in interest rates or a repeat of 2007 price declines. At this point, it simply looks like a slowing of the increase in house prices as we get into well into 2016 and 2017.”
“The top forecast markets are all showing appreciation in the 10% range with the Pacific Northwest getting very hot,” continues Fox. “Portland, Seattle, and Bend are numbers 1, 2, and 4 in the nation, respectively. Denver and San Francisco continue to be strong as well rounding out the Top 5. Most of these markets have strong economies, growing populations, and month’s supply of homes around 2.0 months or less. With these conditions, it is difficult for these markets to do anything other than appreciate at a good clip. Oregon, Washington, and North Carolina showed the biggest gains in one-year forecast levels from last quarter’s update. Top performing markets continue to confine themselves to California, Colorado, Florida, Washington, and Oregon which comprise 21 of the Top 25 forecast markets.”
The forecast bottom markets are expected to be in the eastern portion of the U.S. New Jersey, Connecticut, parts of New York, West Virginia, Alabama, and parts of Pennsylvania account for well over half of the bottom 25 markets. However even these expected poorest performing of markets are only expected to depreciate slightly or be flat.
*Markets demonstrated are for residential real estate in metro areas (typically greater than 100,000 residents) among single-family homes in the median price tier.
Additional forecasts and graphics for U.S. markets available to the press upon request.
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.
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 and was recently recognized by Purdue as an outstanding alumni in the field of statistical analysis.