Veros Real Estate Solutions released its 2023 Q1 VeroFORECAST that anticipates home prices will be flat overall for the next twelve months. This is a slight improvement from the 0.5% annual depreciation forecast just one quarter ago. VeroFORECAST 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.
Eric Fox, Chief Economist at Veros, commented that, “It appears that we have turned the corner from overall slight annual forecast depreciation one quarter ago to an overall flat forecast now. This suggests that we are now seeing a halt to the continually declining annual forecasts which started a year ago to one that is ticking back up, albeit slightly.”
Fox continues by stating, “We do not see a cataclysmic decline in house prices like so many in the national media are forecasting. The fundamentals for this to occur are simply not there like they were in 2007 or 2008.” One key reason is that although demand has fallen significantly in many markets, supply remains stubbornly low. Buyers do not want to part with their current 3% mortgage interest rate and exchange it for a rate that is more than double if they don’t have to move.
The interesting aspect of the overall housing market is that it continues to be a Tale of Two Cities – those expected to perform relatively well and those expected to perform poorly. Markets in North Carolina, Nebraska, Kansas, and upstate New York are all expected to do relatively well. Florida and Indiana also are standouts at this time.
The weakest markets are often in former top-performing areas and include parts of Texas, California, Washington state, Utah, Nevada, Idaho, and Illinois.
The 10 strongest-performing markets in the country forecast over the next 12 months are only forecast to appreciate at the 4% to 5% level and includes the North Carolina markets of Fayetteville, Greensboro, and Greenville, three markets in the Great Plains including Lincoln, Topeka, and Wichita, two markets in upstate New York (Rochester and Buffalo) and also Cincinnati and Albuquerque. These markets are all at lower price points than many other parts of the country.
The 10 Strongest-Performing Markets Over Next 12 Months
|5||GREENSBORO-HIGH POINT, NC||4.5%|
The 10 least-performing markets over the next 12 months are forecast to depreciate at mid-single digit levels from roughly -4% to -6%. Texas has three markets on this list (Austin, Brownsville, and Victoria) and is joined by the two pricey west coast markets of San Francisco and Seattle, three Utah markets (Provo, St. George, and Ogden), and finally Boise and Atlantic City.
The 10 Least-Performing Markets Over Next 12 Months
|1||AUSTIN-ROUND ROCK-GEORGETOWN, TX||-6.4%|
|3||SAN FRANCISCO-OAKLAND-BERKELEY, CA||-5.3%|
|7||ST. GEORGE, UT||-4.6%|
|9||BOISE CITY, ID||-4.3%|
|10||ATLANTIC CITY-HAMMONTON, NJ||-4.3%|
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