Valuations technology firm Veros is forecasting that U.S. home values will increase about 4.2% over the next year, with only 3% of markets expected to see depreciation.
The firm’s quarterly VeroFORECAST report shows that the U.S. residential real estate market will remain “very strong” in 2018.
States that will see the strongest growth in home prices include Washington, which is “set to boom – occupying all of the top five market spots,” says Eric Fox, vice president of statistical and economic modeling at Veros, in a release.
“This has never happened before with one state occupying all of the top positions,” Fox says. “Seattle is number one, with expected appreciation of over 12 percent, followed by other Washington markets of Bellingham, Bremerton, Kennewick and Mount Vernon, all near 10 percent. These markets show no signs of letting up, as supply of homes is exceedingly low and population continues to grow.”
Metro areas in Colorado, Idaho, Oregon and Washington comprise the remaining metro areas in the Top 10.
Fox adds: “If you want strong appreciation, move to the Northwest portion of the U.S.”
Conversely, 12 of the bottom 25 markets are in the Northeastern states of Connecticut, New Jersey, Maine, West Virginia, Maryland, Pennsylvania and New York.
Bangor, Maine, is forecast to be the worst performing market, with 2% depreciation, and the markets of Bridgeport, Longview, Vineland and Atlantic City, N.J., forecast to have approximately 1% depreciation over the coming year.
“Unfortunately, the fundamentals of these markets remain static, with flat or declining populations and relatively high unemployment rates,” Fox explains. “These factors contribute to a high housing supply with low demand that are unlikely to change anytime soon.”
“Some interesting trends are also emerging with this forecast,” Fox adds. “Parts of California are starting to see an uptick in forecast appreciation, with top-performing markets such as San Diego, San Jose, Los Angeles and Sacramento expected to have appreciation from 7.5 percent to 8 percent, which is up from 6.5 percent to 7.5 percent from the last update. Also, many Texas markets are softening, with Dallas and Austin losing 1 percent in forecast appreciation since the last update.”