— VeroFORECAST projects an increase of 3.9% by December 2020 —
SANTA ANA, Calif., January 9, 2020—Today Veros Real Estate Solutions, an industry leader in enterprise risk management and collateral valuation services, announced that Q4 2019 VeroFORECAST™ data indicates an average projected appreciation rate for residential real estate in the nation’s Largest 100 Housing Markets will be up 3.9% for the year ending December 31, 2020. This forecast is slightly higher than the rate predicted in the first three quarters of 2019, closing the year with moderate home-price growth.
“VeroFORECAST reveals an average increase of 3.9% by the fourth quarter of 2020,” said Eric Fox, Veros vice president of Statistical and Economic Modeling. “The sound fundamentals of the economy, low interest rates and strong levels of employment should result in moderate home-price appreciation with very few geographic pockets of weakness.”
The 10 markets forecasted to increase the most between Q4 2019 and Q4 2020 are primarily located in the Pacific Northwest (Washington, Oregon and Idaho) and the West (Arizona and Utah), with one outlier in Georgia. The defining factor in the strongest markets is a very low housing supply which is forcing prices to increase much more rapidly than in other markets.
The Q4 2019 VeroFORECAST 10 Strongest Markets
| Rank | Metropolitan Statistical Area (MSA) | Q4 2019 – Q4 2020 |
|---|---|---|
| 1 | Spokane, WA | 10.1% |
| 2 | Boise City-Nampa, ID | 9.5% |
| 3 | Idaho Falls, ID | 8.4% |
| 4 | Longview, WA | 8.2% |
| 5 | Kennewick-Pasco-Richland, WA | 8.0% |
| 6 | Phoenix-Mesa-Glendale, AZ | 7.1% |
| 7 | Gainesville, GA | 6.9% |
| 8 | Eugene-Springfield, OR | 6.7% |
| 9 | Provo-Orem, UT | 6.7% |
| 10 | Olympia, WA | 6.5% |
Markets with depreciation are almost non-existent compared to previous quarters. According to the VeroFORECAST for Q4 2020, only Monroe, Louisiana, is expected to decline. Connecticut has three cities in the bottom group, Illinois also has three, California has two, and one metropolitan area in Alabama rounds out the 10 least-performing markets.
The Q4 2019 VeroFORECAST 10 Least-Performing Markets Over Next 12 Months
| Rank | Metropolitan Statistical Area (MSA) | Q4 2019 – Q4 2020 |
|---|---|---|
| 1 | Monroe, LA | -0.5% |
| 2 | Bridgeport-Stamford-Norwalk, CT | 0.6% |
| 3 | Chicago, IL | 0.7% |
| 4 | Torrington, CT | 1.0% |
| 5 | Dothan, AL | 1.0% |
| 6 | Bloomington, IL | 1.1% |
| 7 | Santa Cruz, CA | 1.2% |
| 8 | Champaign, IL | 1.3% |
| 9 | Santa Rosa-Petaluma, CA | 1.3% |
| 10 | Hartford, CT | 1.4% |
In this quarter, it appears that the $10K-cap on the State and Local tax deduction (SALT) has softened markets where these taxes are high and growth is stagnant such as New York, New Jersey and Connecticut. California, also hampered by SALT and has seen some recent out-migration, continues to struggle compared to the years when home prices there were growing by double-digit percentages year over year.
Although Hurricane Florence, a Category 4 storm, made landfall in North Carolina in September 2018 causing significant freshwater flooding, two years later, several markets in North Carolina are expected to be solid performers and should experience above-average appreciation by December 2020. Veros continues to track and report on the property impact of natural disasters through a combination of its disaster data solution offering, as well as the future impact via VeroFORECAST.
VeroFORECAST Methodology
The quarterly VeroFORECAST reports to clients by subscription and to industry media in a summary overview. The report is a projected increase 12-months forward. The current report is based on data from 349 Metropolitan Statistical Areas (MSAs) that include 13,816 zip codes, 1,005 counties, and represent 82% of U.S. residents.
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 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. Veros’ services include automated valuation, 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. 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
