Migration of Population Remains a Key Variable to Determine Market Strength
Santa Ana, Calif. – June 28, 2017 – Veros Real Estate Solutions (Veros), an award-winning industry leader in enterprise risk management, collateral valuation services and predictive analytics, today reports that residential market values will continue their overall upward trends during the next 12 months, with overall annual forecast appreciation of +3.7% which is slightly higher than last quarter’s forecast appreciation of +3.5%. Only 5% of markets are expected to depreciate.
This insight comes from the company’s most recent VeroFORECASTSM, a quarterly national real estate market forecast for the 12-month period ending June 1, 2018.
Our Q2 VeroFORECAST is still showing general market strength for the overall U.S. residential real estate market with continued strength in the West and relative weakness in the Northeast,” says Eric Fox, VP of Statistical and Economic Modeling at Veros. “18 of the top 25 markets are exclusively in the Western states of Washington, Oregon, Colorado, Arizona, Idaho, and Utah. Five more are in the state of Florida. These markets are all characterized by where people want to live and where population is migrating.
Fox continues, “Seattle and Denver again show no signs of letting up as the top markets with the #1 and #2 spots in annual forecast appreciation at 11.1% and 10.3%, respectively.”
According to VeroFORECAST, the Seattle market remains strong with a supply of homes at an extremely low 1.0 month, and its population is continuing to grow rapidly. Its unemployment is only 3.7% (compared to a national rate of 4.3%). Denver, also topping the charts, continues to show a tightening of home supplies at around 1.1 months. Combined with an Unemployment rate of an extremely low 2.1% and rapid population growth, this is one of the forecast’s strongest markets in the country.
As job growth continues to drive migration to the top markets, we will continue to see tight home supplies, causing a heightened housing demand which as we know will cause home affordability to suffer in these areas.
“13 of the bottom 25 markets are exclusively in the States in the northeast portion of the country including New Jersey, New York, Connecticut, West Virginia, Pennsylvania, and Ohio. Many of these markets are characterized by consistent population declines – often over decades,” says Fox. “Atlantic City is forecast to be the worst performing market over the next year with 3.0% depreciation expected.” Fox continues, “Connecticut and New Jersey look particularly weak. But, this does not mean every Northeastern market will fare poorly. In New York, Queens and Brooklyn (Kings Co.) are expected to do very well.”
We are expecting some formerly hot markets to begin to cool off. Austin, TX, is one example where forecast appreciation is expected to drop into the 6% range after consistently having double digit appreciation.
Download the VeroFORECAST Quarterly Report – US Housing Outlook Q2 2017 Report
Additional forecasts and infographics available to 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. 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 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.