Expect Slightly Slower Home-price Growth, Market Still Booming In 2022
Veros Estate Solutions (VEROS®), a provider of enterprise risk management and collateral valuation services, released its Q4 2021 VeroFORECASTSM data that anticipates home prices will appreciate on average 6.8% for the next twelve months, which is a slightly less anticipated growth compared to its Q3 2021 predicted national average appreciation of 7%. The VeroFORECAST evaluates home values in America’s largest 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.
Market fundamentals remain in place to sustain higher prices in most parts of the country. Historically low mortgage interest rates, insufficient new housing starts, record low supply of homes for sale, the prevalence of all-cash buyers, and rapidly declining unemployment rates will continue to keep upward pressure on house values. Though recent Fed actions have started to paint a picture of rising mortgage rates throughout 2022, these increases are expected to be very modest and leave the historical low-rate environment generally intact.
According to Veros’ Chief Economist, Eric Fox, “Though many have been forecasting “gloom and doom” since early 2020, Veros has been consistently saying that prices would be accelerating rapidly, which they have. Nothing has changed in that assessment other than we are seeing rapid levels of price increases stabilizing and slowing down slightly in 2022.”
Top markets are still expected to appreciate at almost a 15% annual rate and even the weakest-performing markets will see low single-digit appreciation. The western states continue their dominance on the Top 10 Strongest-Performing Markets List. Salt Lake City moves up to the #1 position on the list with anticipated appreciation of 14.5% over the next 12 months. There are now four Utah cities making the Top 10. Arizona has two cities on the list, with Phoenix moving up to the #2 position with expected house price increases of 14.3%. Washington state, California, Idaho, and Colorado each have one metro area in the Top 10. Long-time Top 10 entrant Boise, Idaho, has just dropped out of the Top 10.
The 10 Strongest-Performing Markets Over Next 12 Months
| Rank | Metropolitan Statistical Area (MSA) | Forecast Q4 2021 – Q4 2022 |
| 1 | SALT LAKE CITY, UT | 14.5% |
| 2 | PHOENIX-MESA-CHANDLER, AZ | 14.3% |
| 3 | OGDEN-CLEARFIELD, UT | 14.3% |
| 4 | PROVO-OREM, UT | 14.0% |
| 5 | OLYMPIA-LACEY-TUMWATER, WA | 14.0% |
| 6 | COEUR D’ALENE, ID | 13.9% |
| 7 | SAN DIEGO-CHULA VISTA-CARLSBAD, CA | 13.7% |
| 8 | FLAGSTAFF, AZ | 13.7% |
| 9 | COLORADO SPRINGS, CO | 13.3% |
| 10 | LOGAN, UT-ID | 13.3% |
For six quarters in a row now, the two least-performing markets are forecast to be in Texas oil country – Odessa and Midland – although other markets in Texas are expected to do very well. Like last quarter, the same 10 metro markets made the 10 Least-Performing Markets list again, with four Louisiana cities covering four spots. These 10 Least-Performers are still forecast to appreciate slightly.
The 10 Least-Performing Markets Over Next 12 Months
| Rank | Metropolitan Statistical Area (MSA) | Forecast Q4 2021 – Q4 2022 |
| 1 | ODESSA, TX | 2.2% |
| 2 | MIDLAND, TX | 2.5% |
| 3 | HOUMA-THIBODAUX, LA | 2.9% |
| 4 | LAKE CHARLES, LA | 3.1% |
| 5 | DECATUR, IL | 3.2% |
| 6 | SHREVEPORT-BOSSIER CITY, LA | 3.4% |
| 7 | BISMARCK, ND | 3.4% |
| 8 | LAFAYETTE, LA | 3.8% |
| 9 | GRAND FORKS, ND-MN | 3.9% |
| 10 | SPRINGFIELD, IL | 3.9% |
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