With prices on the rise, interest rates relatively low and more sales closing, things would seem to be improving across the board for most of the nation. Unfortunately, this may not be the case for many homeowners, as a recent study has suggested that 20% of homes nationwide are losing value. The study wasn’t all bad news though; a handful of CA markets are expected to appreciate the most next year.
According to VeroFORECAST from Veros Real Estate Solutions, homes in approximately 80% of the country’s real estate markets are expected to appreciate in value in the next 12 months, but the remaining 20% of the markets are expected to depreciate over this time. Additionally, all but the most upbeat markets are slowing in their value improvements.
Veros’ data also suggests that home prices \ will rise 2.5% in the nation’s 100 top metro areas between now and June 1, 2015, marking the eighth consecutive quarter where the index has shown forecast appreciation.
So which markets are expected to prosper the most? According to Veros, all five of the markets strongest in terms of price appreciation are in either California or Texas.
“San Jose housing supplies are down and San Francisco is seeing a serious housing shortage,” said Eric Fox, Veros’ vice president of statistical and economic modeling. “Inventories in both are down 70% from their peak in 2008 and demand is outstripping supply, leading to price run-ups and decreased affordability despite low interest rates. There just aren’t enough houses available that people can afford to buy, so those that remain are hotly contested.”
Here are the five markets that Veros thinks will appreciate the most in the next year:
1. San Jose-Sunnyvale-Santa Clara, California – 10.6% increase
2. San Francisco-Oakland-Fremont, CA – 10.5% increase
3. Austin-Round Rock, Texas –10% increase
4. San Diego-Carlsbad-San Marcos, CA – 9% increase
5. Houston-Sugar Land-Baytown, TX – 8.9% increase
On the other end of the spectrum, markets in parts of Illinois, New Jersey and Pennsylvania are forecast to be among the poorest performers. Here are the five markets that Veros expects appreciation to be the weakest in the next year:
1. Rockford, Illinois – 3.4% decrease
2. Trenton-Ewing, New Jersey – 2.9% decrease
3. Scranton-Wilkes-Barre, Pennsylvania – 2.6% decrease
4. Poughkeepsie- Newburgh-Middletown, New York – 2.5% decrease
5. Atlantic City, NJ – 2.2% decrease
Do you think these price jumps in San Jose and Fan Francisco will encourage more sellers to enter the market? What are your thoughts?
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