Residential real estate values and appreciation grew during the fourth quarter of 2013, but at a slower rate than previous quarters, which may indicate that the market is topping out, analytics firm Veros Real Estate Solutions reported Jan. 16.
The Vero Forecast real estate market outlook is updated quarterly and covers more than 1,000 counties, 345 metro areas and 13,770 zip codes.
Veros’ future home price index indicated that an average of 5.1 percent appreciation on home prices is expected for the top 100 metro areas over the next 12 months — up from the fourth quarter’s 4.8 percent rate of appreciation.
“The future HPI forecast continues to show good appreciation, but the markets appear to be topping out for now,” Eric Fox, Veros’ vice president of statistical and economic modeling and author of Vero Forecast, said in a news release. “The continued appreciation demonstrates the overall health of the real estate market, but it is important to note that this is just a slight increase from last quarter's national forecast, indicating much slowing in the forecasted rate of increase. Currently, most areas in the country are expected to see price appreciation with few areas forecast to show declines.”
Fox noted that roughly 90 percent of markets are expected to show appreciation; fewer than 10 percent are expected to show depreciation.
Local population trends and unemployment rates remain key market drivers, with the most populated metro areas expected to perform the best. The average population of the top 50 metros is 2.4 million and the average population of the bottom 50 metros is 527,000.
The five strongest markets for appreciation are projected to be:
1. San Francisco-Oakland-Fremont, Calif., at 13.4 percent
2. San Jose-Sunnyvale-Santa Clara, Calif., at 10.7 percent
3. Seattle-Tacoma-Bellevue, Wash., at 10.2 percent
4. Los Angeles-Long Beach-Santa Ana, Calif., at 9.6 percent
5. Midland, Texas, at 9.5 percent
The five weakest markets for appreciation are projected to be:
1. Atlantic City, N.J., at -1.7 percent
2. Kingston, N.Y., at -1.7 percent
3. Fayetteville, N.C., at -1.3 percent
4. Norwich-New London, Conn., at -1.2 percent
5. Rockford, Ill., at -1.1 percent