The average appreciation rate for residential real estate in the nation’s 100 largest markets is forecasted to be 3.7% over the next year ending on June 1, 2020, according to a Veros Real Estate Solutions.
Veros states that anticipated rate of 3.7% is unchanged from the rate predicated in Q1 2019, and signified a “leveling out” after a four-quarter decline from a projected appreciation rate of 4.5% last year.
"This flattening indicates that although there is definite softness overall in the housing market the fundamentals are healthy," said Eric Fox, Veros VP of Statistical and Economic Modeling, and the report's author. "One potential contributing factor we saw in the models is some softening of mortgage interest rates, which is helping to prop up values and stem the decline."
According to the report, another area that is holding steady is that 5% of the nation’s markets are expected to depreciate over the next year, which has not changed since Q4 2018.
The Veros report states that Odessa, Texas, is expected to have the nation’s highest appreciation rate of 9.7%. Coeur D’Alene, Idaho, followed at 9.5%, and Idaho Falls, Idaho, was No. 3 at 9.4%.
Grand Forks, North Dakota, is projected to see home values fall by 1.9% over the next year—the highest in the nation. Bridgeport-Stamford-Norwalk, Connecticut, came in at No. 2 at -1.7% and Baton Rouge, Louisiana, is expected to see home values fall 1.6%.
Louisiana and Connecticut combined to have six of the 10 cities with the highest expected drops in home value: Lafayette, Louisiana; Shreveport-Bossier City, Louisiana; Houma-Bayou Cane-Thibodaux, Louisiana; and Norwich-New London, Connecticut.
The report adds that the West Coast is not expected to see the growth in real estate value that is being witnessed in the Pacific Northwest. Prices for property in California is expected to remain soft, with major markets such as Los Angeles, San Francisco, and San Diego, expected to appreciate between 2.5% and 4.5%.
Also expected to remain soft through next year is the New York-Northern New Jersey-Long Island metro, which is the nation’s largest market. Manhattan is expected to see depreciation rates of 2.5%, and New Jersey is forecasted for appreciation of just 1.7%.