Enterprise risk management and collateral valuation services company Veros Real Estate Solutions has released its first quarter 2023 VeroFORECAST which forecasts home prices over the course of the next year.
Overall, the VeroFORECAST now anticipates that home prices will remain relatively flat over the next 12 months, a slight improvement from the fourth quarter 2022 forecast which predicted a 0.5% depreciation over the next year.
Veros’ forecast evaluates home prices in more than 300 of the nation’s largest metropolitan markets.
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.”
Even though prices are predicted to remain flat, there will be some standouts such as markets in North Carolina, Nebraska, Kansas, and New York to post positive numbers while other markets in Texas, California, Washington, Utah, Idaho, and New Jersey are expected to sink in the single-digit range.
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 andAlbuquerque. These markets are all at lower price points than many other parts of the country.
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.