Cities in Western States Expected to Dominate Home Price Increases
SANTA ANA, Calif., April 7, 2021—Today Veros Real Estate Solutions, an industry leader in enterprise risk management and collateral valuation services, released its Q1 2021 VeroFORECASTSM data that anticipates home price appreciation will increase significantly during the next 12 months in the 100 most-populated markets. Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, social and geographic variables as they pertain to home value. This data-driven approach indicates that many of the top-performing cities are trending upwards at a double-digit rate.
By Q1 2022, the overall average forecast is 7%, an additional increase of 1.1 percentage points compared to 5.9% just a quarter ago. This level of change from one quarter to the next is heavily driven by strong markets, primarily in the West.
“The VeroFORECAST data indicates upward price pressure in nearly all markets during 2021,” said Darius Bozorgi, CEO of Veros Real Estate Solutions. “Buyer demand remains strong with almost no major metro area showing notable home price depreciation over the next 12 months.”
Reflecting back on March 2020, the novel Coronavirus impacted the U.S. causing speculation that the real estate industry would face severe home price declines. At that time, the VeroFORECAST made a bold prediction that the global pandemic would only briefly impact housing prices. The market paused for only one quarter, then resumed appreciating in the subsequent quarters and continues to perform remarkably.
“2021 market conditions will be heavily driven by continued low-interest rates and changes in “working from anywhere” practices that were influenced by the Coronavirus pandemic,” said Eric Fox, Veros Vice President of Statistical and Economic Modeling. “Once the global pandemic is largely behind us, interest rates will stabilize and rise to some degree but will remain at historically low levels. At that point, we expect the nationwide market to return to a more typical pattern characterized by regional pockets of strength driven by migration patterns, solid fundamentals in many areas, and weaker markets with slight depreciation in a few others.”
The western portion of the country leads the nation in price increases. Cities in Idaho, Washington, Arizona, Utah, Colorado and California comprise the entirety of the Top 10 metro areas. Appreciation is forecast to continue strengthening with Boise up an astonishing 17.1% by Q1 2022. Many of these cities are benefiting from new household formation as migration patterns continue to move around the country.
The 10 Strongest-Performing Markets Over Next 12 Months
|Rank||Metropolitan Statistical Area (MSA)||Forecast Q1-2021 - Q1 - 2022|
|1||BOISE CITY, ID||17.1%|
|2||COEUR D’ALENE, ID||15.3%|
|4||SPOKANE-SPOKANE VALLEY, WA||13.1%|
|5||SALT LAKE CITY, UT||13.1%|
|6||COLORADO SPRINGS, CO||12.4%|
|8||IDAHO FALLS, ID||11.8%|
|9||SAN DIEGO-CHULA VISTA-CARLSBAD, CA||11.6%|
|10||BREMERTON-SILVERDALE-PORT ORCHARD, WA||11.3%|
The list of ten least-performing markets is dominated by cities in Texas, Louisiana and Illinois. The two markets that will see the slowest growth are forecast to be in Texas oil country – Odessa and Midland. However, they are predicted to appreciate at 1% or 2%
The 10 Least-Performing Markets Over Next 12 Months
|Rank||Metropolitan Statistical Area (MSA)||Forecast Q4 2020 – Q4 2021|
|4||LAKE CHARLES, LA||3.2%|
|6||SHREVEPORT-BOSSIER CITY, LA||3.5%|
|9||IOWA CITY, IA||3.6%|
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 324 Metropolitan Statistical Areas (MSAs) that include 16,717 zip codes, 1006 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 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. 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. 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.