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VeroFORECAST US Housing Report - September 2018

New Veros® VeroFORECAST™ Projects 7 of 10 Top-Appreciating Markets will be in Washington and Nevada over next 12 months

Oct 10, 2018

Twelve-month VeroFORECAST predicts average property value appreciation of 4.5%, with appreciation projected in 97% of MSAs analyzed and depreciation in only 3% 

Santa Ana, Calif. – October 10, 2018 – Veros® Real Estate Solutions (Veros), an award-winning industry leader in enterprise risk management, collateral valuation services and predictive analytics, has released its third quarter 2018 VeroFORECAST, with predictions of how property values in Metropolitan Statistical Areas (MSAs) across the nation will fare between September 1, 2018 and September 1, 2019. 

“Our latest VeroFORECAST indicates that on average, for the top 100 most populated metro areas, we expect 4.5% appreciation over the next 12 months,” said Eric Fox, VP of Statistical and Economic Modeling at Veros. "This is the 25th quarter in a row where this index has forecast overall appreciation. We are forecasting that the overwhelming number of metros across the nation, approximately 97 percent, will appreciate, with just three percent depreciating during this period. The fact that these averages are identical to those of last quarter's update indicates that we are seeing consistency in nearly every metro market."  

Western states continue to hold all top ten spots, with forecast appreciation rates running roughly between nine and 12 percent. Seven of those MSAs with the highest-projected appreciation are in Washington and Nevada, with the other three in Idaho, California and Colorado. Another Western state, Utah, is also projected to be a solid performer. These five states, along with Oregon, have provided the index's highest-ranked markets throughout 2018. It is an indication of the changing economy of Idaho that, after being represented in the year's first two quarterly reports by Pocatello, Idaho, with a population of approximately 83,000, we now see the Boise City-Nampa MSA, with more than a third of the state's population, moving in at 11.2 percent, VeroFORECAST's second-highest projected appreciation figure. 

"This is a very strong showing, with the average appreciation of the Top 10 markets forecast to be a half-percentage point higher than in our last report," Fox said. He added that, from an overall perspective, the latest report signals "more of the same" for property values in these markets.  Furthermore, for many of the markets for which data was analyzed, interest rates appear to be softening this quarter's forecasts by one to two percent over what they would have been had the flat interest rate environment of the past several years continued. 

Despite the Western MSAs' domination of projected U.S. real estate appreciation, there are bright spots in every region. In the South, North Carolina is projected to perform well, as are the Midwest states of Michigan and Indiana, especially the Indianapolis-Carmel, IN MSA, where property values are projected to appreciate at 8.5 percent. 

Indiana's next door neighbor, Illinois, however, is forecast to do very poorly, with three of its MSAs in VeroFORECAST's Bottom 10: Bloomington-Normal is forecast to appreciate at just 0.3 percent through next August, and Peoria and Danville are predicted to depreciate at -0.7 percent and -1.2 percent, respectively. 

In the South, Texas has healthy markets, notably Midland and Odessa, which show definite strengthening while others, such as Dallas and College Station, show definite slowing since last quarter’s report. Although its Bay Area jewel, the San Francisco-Oakland-Fremont MSA, ranks in the Top 10 with projected 9.6 percent appreciation, parts of California are beginning to show some signs of slowing down. San Jose, for example, is showing a projected appreciation rate dropping from double-digits to 8.3 percent over the next 12 months.  

In this third-quarter 2018 VeroFORECAST, the top market, Bremerton-Silverdale, is predicted to appreciate more than a half-percentage higher than the top market in the previous report, Seattle-Tacoma at 11.1 percent. On the other end, the Farmington, NM MSA is predicted to depreciate a half-percentage point more than the second-quarter's lowest scorer, Cumberland, MD-WV, at -1.6 percent. Here are the new report's Top 10 and Bottom 10 projected markets through August 2019: 

TOP 10

  1. Bremerton-Silverdale, WA....................................................... 11.7%
  2. Boise City-Nampa, ID.............................................................. 11.2%
  3. Las Vegas-Paradise, NV......................................................... 10.8%
  4. Bellingham, WA....................................................................... 10.6%
  5. Olympia, WA............................................................................ 10.3%
  6. Carson City, NV....................................................................... 10.1%
  7. Reno-Sparks, NV..................................................................... 10.0%
  8. San Francisco-Oakland-Fremont, CA....................................... 9.6%
  9. Denver-Aurora-Broomfield, CO................................................. 9.5%
  10. Seattle-Tacoma-Bellevue, WA.................................................. 9.3%

BOTTOM 10

  1. Farmington, NM........................................................................ -2.2%
  2. Vineland-Millville-Bridgeton, NJ............................................... -1.6%
  3. Danville, IL................................................................................ -1.2%
  4. Peoria, IL.................................................................................. -0.7%
  5. Ocean City, NJ ........................................................................ -0.4%
  6. Texarkana, TX-Texarkana, AR................................................ -0.2%
  7. Torrington, CT.......................................................................... -0.2%
  8. Shreveport-Bossier City, LA...................................................... 0.2%
  9. Bridgeport-Stamford-Norwalk, CT............................................. 0.2%
  10. Bloomington-Normal, IL ............................................................ 0.3%

 "Housing supply is a key discriminator between the forecasted top- and bottom-performing markets," Fox said. "Where the housing supply is very low, as in our top markets, prices are expected to increase significantly. By contrast, for many of the bottom markets, which are in very slow growth metros, housing supply is projected to remain high." 

For this latest VeroFORECAST, the average population of the Top 25 metros is 1.2 million and the average population of the Bottom 25 metros is 304,000, and it appears that the most populated metro areas are on average forecast to perform the best in the next 12 months while the least populated are forecast to perform the worst. 

THE VALUE OF VEROFORECAST

Businesses can license the reports for all areas they serve and use the valuation forecast models to gain competitive expertise at the metropolitan, county, and zip code level. Those designations are further stratified by property type and three price tiers at the county and zip code levels and are used to add greater granularity and forecast performance. 

"VeroFORECAST data benefits anyone with an interest in real estate values, including lenders and servicers, default management professionals, and capital markets firms, as well as investors, insurers, guarantors, and regulators” said Veros President and CEO Darius Bozorgi. “Veros offers a proven service that drills down to single MSAs, counties and zip codes to provide an accurate view of what to expect in local markets. Independent analysis shows that we have been delivering the industry’s most accurate forecast data for more than fifteen years now, outperforming all other providers." 

Real estate and mortgage professionals and those in the financial services sector who wish to receive either the complete quarterly reports or regional reports as they are released can subscribe. For more information email communications@veros.com or call (866) 458-3767. 

Additional forecasts and infographics for U.S. markets are available to the press for download and upon request. 

Download the VeroFORECAST Report Press Release and Infographics ( PDF)
Download the infographics as a PDF
Download the full infographics as an image
Download the Overview of Nationwide Performance Infographics as an image
Download the Top 10 Markets Infographics as an image
Download the Bottom 10 Markets Infographics as an image

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. 

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 30 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.  

Media Contact
Darcy Patch
VP of Marketing
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dpatch@veros.com 
communications@veros.com


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