Certain markets in the West will continue to appreciate at double digit rates over the next year, according to Veros Real Estate Solutions’ Q2 VeroFORECAST report, which measures predicted home appreciation on a yearly scale.
The metro that they predict will see the highest home price appreciation is—no surprise—Seattle, Washington, with an estimated 11.1 percent increase. The Denver metro is a close second, with 10.3 percent increase home appreciation. VeroFORECAST lists population growth and low unemployment—Seattle boasts an unemployment rate of 3.7 percent, compared to the national average of 4.3 percent, and Denver’s rate is as low as 2.1 percent—as major contributing factors to the rapid rate home appreciation. However, home appreciation does have its downside for would-be homeowners in that inventory is way down. It is estimated that Seattle has about a 1.0 month supply of homes available at the current closing rate, and Denver doesn’t look much better, at a 1.1 month supply.
“As job growth continues to drive migration to the top markets, we will continue to see tight home supplies, causing a heightened housing demand which as we know will cause home affordability to suffer in these areas,” said Eric Fox, VP of Statistical and Economic Modeling at Veros.
Of the top 25 markets showing signs of increased home appreciation, 18 metros are located in western states, including Colorado, Washington, Oregon, Arizona, Utah, and Idaho. Only five reside in Florida. Previously hot markets, such as Austin, Texas, are expected to cool. Austin once showed double digit appreciation, but now is only expected to appreciate at a rate of around 6 percent.
Conversely, the Northeast shows the largest cluster of depreciating home values—New Jersey, New York, Connecticut, Pennsylvania, Ohio, and West Virginia among the worst of the lot. The bottom 15 worst markets all show negative appreciation, while 15 to 25 show less than a 1 percent appreciation rate. VeroFORECAST contributes low and negative appreciation values to consistent population decline.