San Diego should see home prices rise 3.5% next year, but prices in Florida and Nevada, two states where the foreclosure crisis is especially acute, will drop 6% to 7%, according to a real estate market forecast.
While 40% of major metros are expected to see appreciation in home prices, most of that is expected to be fairly mild.
The forecast comes from Santa Ana, Calif.-based Veros Real Estate Solutions, a technology firm serving the financial services industry.
The forecast looks at the median price tier in metros of 500,000 or more. For December 2010 through December 2011, select markets in the U.S. can expect to witness 2.5% to 3.5% appreciation on home values, including Washington state’s tri-city area.
Projected five strongest markets:
1. San Diego / Carlsbad / San Marcos, Calif. (+3.5%)
2. Kennewick / Richland / Pasco, Wash. (+3.4%)
3. Pittsburgh, Pa. (+2.7%)
4. Fargo, N.D. (+2.6%)
5. Washington, D.C. metro area (+2.5%)
Projected five weakest markets:
1. Reno/Sparks, Nev. (-7.2%)
2. Orlando/Kissimmee, Fla. (-6.5%)
3. Boise City/Nampa, Idaho (-6.4%)
4. Deltona/Daytona Beach/Ormond Beach, Fla. (-6.3%)
5. Port St. Lucie/Fort Pierce, Fla. (-6.3%)
Looking out to the 12 to 24 month horizon, nearly 60% of markets are expected to appreciate,” he says, “So while things aren’t happening rapidly, the forecast indicates they are getting better.”
Veros provides forecasts on the national real estate market with the capacity to segment results by property types, pricing tiers, and by metro area, county or ZIP code. The forecast utilizes more than 50 critical decisioning factors to develop reliable market trend predictions, the company said. It takes into account factors such as unemployment and housing inventory levels, among others.
Also from HW:
National home prices will not increase from the previous year until the fourth quarter of 2012, according to a panel of economists surveyed by MacroMarkets, a financial technology company.
The survey was compiled from 110 responses in December, and it is based upon the projected path of the Standard & Poor’s/Case-Shiller national home price index over the next five years. According to the survey, home prices in the fourth quarter of 2010 will show a 1.13% drop from a year ago, but will begin to stabilize.
At the end of 2011, prices are expected to remain 0.17% below where they will be at the end of this year. But by the close of 2012, prices will have begun its long journey to recovery, increasing nearly 2% from 2011, according those surveyed. By 2015, prices will be increasing by more than 3.5% from the previous year.
Robert Shiller, who co-founded MacroMarkets and remains its chief economist, said less than 3% of those surveyed expected a negative change in 2015. The 3.7% increase expected in that year would be higher than the average annual rate of increases before the bubble.
MacroMarkets Managing Director Terry Loebs said the survey consistently points to price stability in the intermediate and long-term. However, he stressed that the recovery will be long road.
“Weak market fundamentals persist and continue to gnaw at wealth and confidence in these uncharted, post-bubble waters,” Loebs said.