Veros: Housing Market in ‘Full Recovery Mode’ After Hitting Bottom

The national housing market has hit bottom and is now ""in full recovery mode,"" according to ""Veros Real Estate Solutions,"":http://www.veros.com/newsroom/press-releases/veroforecast-indicates-real-estate-market-has-hit-bottom,-is-in-full-recovery-mode.aspx a provider of risk management and valuation services.

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The company forecasts a 1.2 percent rise in prices in the nation's top 100 markets over the 12 months ending in December 2013.

While there remains--as always--some variance across markets, Veros predicts prices in two-thirds of all markets across the nation will either remain flat or rise over the next 12 months. This is the first time since the recession that Veros has forecast gains (or at least no declines) for this large a proportion of markets.

Markets expected to depreciate over the next 12 months will likely experience declines of 2 to 3 percent, which, according to Veros, ""is a typical level of depreciation of the poorest performing markets even during healthy market periods.""

""Overall, the recovery in the housing market is forecast to continue to accelerate,"" said Eric Fox, VP of statistical and economic modeling at Veros.

While predicting the recovery to be ""lengthy and gradual,"" Fox insists ""we are finally ├â┬ó├óÔÇÜ┬¼├ï┼ôover the hump' at a national level.""

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For the first time since 2006, Veros expects double-digit appreciation in one market: Phoenix is set to experience a 10 percent increase in prices over the next 12 months.

Phoenix's ""low supply and high demand, in conjunction with the Phoenix area's lower unemployment rate of 6.8 percent, compared to the national unemployment rate of 7.9 percent, sets the stage for it to be 2013's top performing market,"" Fox said.

The market expected to experience the second-highest appreciation rate is Midland, Texas, where values will rise about 9 percent, according to Veros. Midland's economy is benefiting from its oil sector and has an unemployment rate of 3.4 percent, well below the national level.

Following Phoenix and Midland, the next three anticipated top-performing markets for this year are Miami (8 percent), Tampa (6-7 percent), and Denver (6-7 percent).

These markets underwent significant price depreciation during the housing crisis and are still highly affordable. Additionally, Miami is benefiting from population growth and international buyers, while energy and technology startups are flocking to Denver, strengthening its economy.

The five markets expected to do the worst over the next year are all located in the Northeast, where unemployment remains high.

Veros forecasts Poughkeepsie-Newburgh-Middletown, New York, to be the worst-performing market with a decline of 3.1 percent. The New York market will be followed by Allentown-Bethlehem-Easton, Pennsylvania-New Jersey (-2.6 percent); Norwich-New London, Connecticut (-2.5 percent); York-Hanover, Pennsylvania (-2.5 percent); and Trenton-Ewing, New Jersey (-2 percent).

Veros observes and analyzes real estate in 975 counties, 335 metro areas, and 13,586 ZIP codes for its quarterly reports.