—The VeroFORECAST projects appreciation over the next 12-months will remain steady, signaling a healthy real estate economy in the 2020 election year—
SANTA ANA, Calif.—Today Veros Real Estate Solutions, an industry leader in enterprise risk management and collateral valuation services, announced that Q3 2019 VeroFORECAST™ data revealed the average projected appreciation rate for residential real estate in the nation’s Largest 100 Housing Markets will be up 3.7% over the 12 months ending September 30, 2020. This forecast maintains the same rate predicted in both the first and second quarters of 2019, indicating moderate, steady growth in 2020, despite recent predictions of an election-year housing slump.
“Veros data shows home price growth in 2020 will be slow and steady,” said Eric Fox, Veros vice president of Statistical and Economic Modeling. “Despite some clear headwinds facing the economy next year, housing fundamentals will prevail. While we won’t experience a boom, we aren’t going to go bust, either.”
The forecast for the 10 strongest markets between Q3 2019 and Q3 2020 reveals that many of them are located in just three states, Washington, Idaho and Texas. The defining factor in the strongest markets is the very low housing supply which is forcing prices to increase much more rapidly than other markets.
The Q3 2019 VeroFORECAST 10 Strongest Markets
| RANK | METROPOLITAN STATISTICAL AREA (MSA) | Q3 2019 – Q3 2020 |
|---|---|---|
| 1 | KENNEWICK-PASCO-RICHLAND, WA | 8.6% |
| 2 | BOISE CITY-NAMPA, ID | 8.5% |
| 3 | POCATELLO, ID | 8.3% |
| 4 | ODESSA, TX | 8.2% |
| 5 | IDAHO FALLS, ID | 8.2% |
| 6 | SPOKANE, WA | 7.4% |
| 7 | YAKIMA, WA | 7.2% |
| 8 | PHOENIX-MESA-GLENDALE, AZ | 6.8% |
| 9 | BELLINGHAM, WA | 6.7% |
| 10 | MIDLAND, TX | 6.6% |
The top 10 MSAs are only separated by 2 percentage points. Two states in the Northwest continue to dominate the highest appreciating markets, with four MSAs in Washington and three in Idaho. There are two MSAs in the top 10 that are in oil-rich Texas markets, specifically Odessa, up 8.2%, and Midland, up 6.6%. The outlier is Phoenix which has come back significantly since the real estate crash that began in 2007 and that MSA now claims a top-10 spot, up 6.8%.
Veros’ analytics predicts that most markets will remain healthier than not, as historically low-interest rates, combined with record-high employment, will continue to keep home prices moving in a positive direction. However, the pace of growth will be moderate compared to previous years. Veros expects only four markets will experience significant depreciation next year, but on the other hand, remarkably high levels of appreciation are not anticipated, either.
The Q3 2019 VeroFORECAST Only 4 Depreciating Markets Over Next 12 Months
| RANK | METROPOLITAN STATISTICAL AREA (MSA) | Q3 2019 – Q3 2020 |
|---|---|---|
| 1 | KOKOMO, IN | -0.9% |
| 2 | GRAND FORKS, ND-MN | -0.7% |
| 3 | NEW HAVEN-MILFORD, CT | -0.1% |
| 4 | CAPE CORAL-FORT MYERS, FL | -0.1% |
Of note, the midwestern states are positioned to have solid, above-average appreciation in the 4% to 5% range for many major markets in Indiana, Michigan, Ohio and Kentucky. Illinois remains the exception as the only midwestern state not expected to fare well. Voters in the Midwest, often seen as a pivotal voter base in an election year, should feel some homeowner satisfaction and will likely not point to volatile home prices as a reason to disrupt, or vote-out, their current elected officials.
California continues to report sluggish growth for the next 12 months. Nearly all major markets in the state are expected to appreciate only in the 2% to 3% range, including cities that used to lead the national growth trajectory including Los Angeles, San Diego, San Francisco and San Jose. Considering the average increase for the year is expected to be 3.7%, projections in those cities is definitely below average.
Download the Q3 2019 VeroFORECAST results as an infographic
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 344 Metropolitan Statistical Areas (MSAs) that include 13,801 zip codes, 1,002 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
