Real estate valuations technology firm Veros is forecasting that U.S. home values will remain basically flat over the next year, with some markets seeing home price appreciation while others will see depreciation.
“It appears that we have turned the corner from overall slight annual forecast depreciation one quarter ago to an overall flat forecast now,” says Eric Fox, chief economist at Veros, in the firm’s Q1 VeroFORECAST report. “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.”
As of the fourth quarter, the firm was forecasting that home prices would fall 0.5% in 2023.
One key reason home prices are now expected to remain flat is that although demand has fallen significantly in many markets, supply remains stubbornly low.
That’s because many home owners are rate-locked into their current homes and thus have no plans to move anytime soon.
But the gains will be regionally uneven, the firm predicts.
“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,” Veros says in its report. “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 report states.