Veros Predicts Housing Market to Slow Significantly as the Number of Markets Forecast to Depreciate Accelerates

SANTA ANA, Calif., October 11, 2022 —Today, Veros® Real Estate Solutions, an industry leader in enterprise risk management and collateral valuation services, released its 2022 Q3 VeroFORECASTSM that anticipates home prices will appreciate on average just 1.5% for the next twelve months. This is a significant drop from the 4.5% annual appreciation forecast just one quarter agoVeroFORECAST evaluates home prices in over 300 of the nation’s largest housing markets. Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, housing, and geographic variables pertaining to home value. 

The steep decrease in expected average appreciation of only +1.5% over the next 12 months is not a “one size fits all” for every market but rather a combination of dozens of markets expected to depreciate, many markets that are forecast to be relatively flat, and a few markets that are still expected to appreciate reasonably well.  But clearly, the most notable finding in this update is the increase in expected depreciating markets as compared to the update one quarter ago. 

Eric Fox, Chief Economist at Veros commented that, “The number of markets expected to have annual depreciation has grown from just a few during our previous quarterly update to now a few dozen during this update.  Though most depreciation is expected to be mild at this point, the increase in number of markets where it is forecast to be present is a noteworthy change.  Some markets such as Atlantic City are still forecast to depreciate the most at around 4%.  However, there are former hot-running cities such as Las Vegas and Boise which are now appearing near the bottom of the pack with low single-digit depreciation expected.  Interest rates increases and the fear of recession are driving some buyers to the sidelines which is causing some of these trends.” 

However, all markets cannot be characterized by negative outlooks.  Markets in the middle of the country such as Lincoln and Omaha, Nebraska, and Wichita Kansas are looking strong with 6% to 7% appreciation expected over the next year.  Newcomers Richmond, Virginia, and Indianapolis are also expected to be solid performing markets with annual appreciation expected in the 6% range.  Likewise, North Carolina continues to be strong with its expected performance.  All of these markets are characterized by lower median prices meaning rising interest rates have a lesser impact.   

The 10 strongest performing markets in the country forecast over the next 12 months are only forecast to appreciate at the 5% to 7% level which is somewhat lower than last quarter’s update and significantly than what the top performing markets were expected to do just six months ago.   

The 10 Strongest-Performing Markets Over Next 12 Months

Rank Metropolitan Statistical Area (MSA) Forecast Q3 2022 - Q3 2023
1 LINCOLN, NE 7.2%
2 RICHMOND, VA 6.9%
3 OMAHA, NE 6.4%
4 INDIANAPOLIS, IN 6.4%
5 WICHITA, KS 6.4%
6 FAYETTEVILLE, NC 6.3%
7 WARNER ROBINS, GA 5.9%
8 WILMINGTON, NC 5.8%
9 GOLDSBORO, NC 5.8%
10 GRAND RAPIDS, MI 5.7%

The 10 least performing markets over the next 12 months had the most notable changes.  In last quarter’s forecast, there were 5 markets forecast to depreciate.  However, now all of these 10 markets are forecast to depreciate in the next year.     

The 10 Least-Performing Markets Over Next 12 Months

Rank Metropolitan Statistical Area (MSA Forecast Q3 2022 - Q3 2023
1 ATLANTIC CITY, NJ -3.7%
2 LAKE CHARLES, LA -2.4%
3 CHICAGO, IL -2.0%
4 LAS VEGAS, NV -1.9%
5 COEUR D'ALENE, ID -1.8%
6 PRESCOTT VALLEY, AZ -1.6%
7 ST. GEORGE, UT -1.3%
8 EVANSVILLE, IN -1.3%
9 BOISE CITY, ID -1.2%
10 ODESSA, TX -1.1%

VeroFORECAST Methodology

The quarterly VeroFORECAST reports to clients by subscription and to industry media in a summary overview. The current report is based on data from 313 Metropolitan Statistical Areas (MSAs), including 16,684 ZIP codes, 970 counties, and 81% of US residents. The report is a projected increase 12-months forward.

Source: Veros Real Estate Solutions

This information is intended for use by the media for economic reporting and should only be used for physical or digital publication or broadcast, in whole or in part, must be sourced as coming from Veros Real Estate Solutions. The company name should appear with the first reference of the data. If the data are illustrated with maps, charts, graphs or other visual elements, the company name must be visible on the screen or website. For questions, analysis, interpretation of the data, or permission to reproduce, contact Brian Fluhr at BFluhr@veros.com.

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 numerous technical papers on probabilistic and statistical methods.

About Veros Real Estate Solutions

A mortgage technology innovator since 2001, Veros is a proven leader in enterprise risk management and collateral valuation services. The firm combines the power of predictive technology, data analytics, and industry expertise to deliver advanced automated solutions that control risk and increase profits throughout the mortgage industry, from loan origination to servicing and securitization. In 2022, Veros acquired Valligent Technologies a leader in appraisal, alternative valuation, QC and Regulatory Audit solutions. Veros’ services now include the full spectrum of valuation solutions inclusive of virtual and automated valuations, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is the primary architect and technology provider of the GSEs’ Uniform Collateral Data Portal® (UCDP®). Veros also works closely with the FHA to support its Electronic Appraisal Delivery (EAD) portal. The company is also making the home buying process more efficient for our nation’s Veterans through its appraisal management work with the Department of Veterans Affairs. For more information, visit www.veros.com or call 866-458-3767.

Media Contact

Brian Fluhr
Vice President of Marketing
bfluhr@veros.com or communications@veros.com

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