Veros Real Estate Solutions, a provider of enterprise risk management and collateral valuation services, released its Q2 2021 VeroFORECAST data that anticipates home prices will continue to appreciate at high levels during the next 12 months in the 100 most-populated markets at a rate consistent with our previous update one quarter ago. 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 Q2 2022, the overall average forecast is up 7% which is consistent with the annual forecast made in this forecast one quarter ago. The continued year-over-year increase is heavily driven by robust markets, primarily in the West. Five of the strongest-performing markets are located in Idaho.
“The VeroFORECAST data continues to exhibit upward price pressure in nearly all markets throughout 2021 and into 2022,” said Darius Bozorgi, CEO of Veros Real Estate Solutions. “Buyer demand is strong in nearly every market in the country. We are squarely in a seller’s market and buyers have no choice but to put forward the best offer they can, frequently making offers above asking price, to secure the home they want to own.”
“Right now, buyers are acting on pent-up demand and sellers are seeking top dollar for their homes,” said Eric Fox, Veros Real Estate Solutions Chief Economist. “The tight inventory of for-sale homes, coupled with low interest rates are keeping prices strong across the country.”
The record-low interest rate environment is likely to be in place for the foreseeable future. “The Federal Open Market Committee participants recently indicated that risks to inflation were weighted to the upside. Despite that, they have not slowed the pace of bond buying. They have their foot on the accelerator full speed ahead and are only thinking about discussing slowing down,” added Fox.
The western portion of the country leads the nation in price increases. Cities in Arizona, Colorado, Idaho, Utah, and Washington, comprise the entirety of the Top 10 metro areas. Notably, all of these top markets have double-digit appreciation values above 12%. Boise will be up an astonishing 18% by Q2 2022. Four other markets in Idaho are among the top ten markets including Pocatello, Coeur d’Alene, Idaho Falls, and Logan, UT (located on the Utah-Idaho border). Many of these markets are benefiting from population in-migration as consumers move around the country.
The cities that appear on the list of ten least-performing markets are found in Illinois, Iowa, Louisiana, North Dakota, and Texas. Of the 100 most-populated markets, the two markets that will see the slowest growth, and a potential decline, are located in Texas oil country – Odessa and Midland – although other markets in Texas are expected to do very well.
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