According to various reports, it appears that home prices are still going to rise in 2014, but the only question is what kind of increase to expect. Analysts from Morgan Stanley and Barclays expect home prices to appreciate by 7% nationally, but new information from Veros Real Estate Solutions suggests that home prices will only appreciate by 3.4% in the top 100 metro areas.
Those figures are courtesy of Veros’ VeroFORECAST national real estate market forecast for the 12-month period ending March 31, 2015. That’s down from last quarter’s forecast of a 5.1% increase for the following 12 months.
“The wave of appreciation may have crested, but it has been an impressive recovery in many respects,” said Eric Fox, Veros’ vice president of statistical and economic modeling. “The market is stabilizing and the overall outlook is very positive. However, we won’t see the rapid gains we have experienced in prior quarters. Those days appear to be behind us for the foreseeable future.”
Fox notes that their average national forecast for the next 12 months is 3.4% appreciation, but the forecast for the 12 months following that (months 13-24) is only 2%.
But there is positive news for some cities where the large improvements haven’t disappeared completely.
Click below for the five markets that Veros expects to experience the highest home price appreciation over the next 12 months.
5. San Francisco-Oakland-Fremont, CA
Veros’ data expects home prices in the Northern California metro area to rise by 8.8% in the next 12 months. And with home prices in the area already at the highest level in the country, the market by the bay is one of the strongest in the country.
4. Bismarck, ND
North Dakota has recently been called the “Saudi Arabia of the United States” due to its booming energy market. Homes in the state’s capital city are expected to rise by 9.1% in the next 12 months.
3. Midland, TX
Midland is also experiencing an energy boom, making the West Texas city a very strong market for homes. Veros’ data expects the homes in Midland to appreciate by 9.3% in the next 12 months.
2. Los Angeles-Long Beach-Santa Ana, CA
Southern California has a warm climate and a hot real estate market. Homes in the area are expected to appreciate by 9.3% as well.
1. San Jose-Sunnyvale-Santa Clara, CA
The number one market for home price appreciation is expected to see an increase of 9.7% in the next 12 months. That’s almost three times the expected national average.
Click below for a list of Veros’ five weakest markets for the next 12 months.
5. Winston-Salem, N.C.
North Carolina’s fifth largest city is home to six colleges and universities and was the birthplace of Krispy Kreme Donuts. But the home market in the city is expected to be weak in the next 12 months. Homes in the Winston-Salem area are expected to depreciate by 1.6% in the next 12 months.
4. Rockford, Ill.
Members of the band Cheap Trick better beware. The band started in the area and its members still live in Rockford, but home prices in the area are expected to depreciate by 1.6% in the next 12 months.
3. Fayetteville, N.C.
Fayetteville is the home of Fort Bragg, the world’s largest airborne facility, with more than 45,000 military personnel. However, home prices in the area are expected to fall by 1.6% in the next 12 months as well.
2. Norwich-New London, Conn.
Norwich was the birthplace of Benedict Arnold and New London is the smallest city in the state. Home prices in the metro area are expected to depreciate by 1.7% in the next 12 months.
1. Atlantic City, NJ
Don’t tell Donald Trump, but Atlantic City is expected to be the worst city for home prices over the next 12 months. The city is home to 12 casinos, including two bearing Trump’s name, but the homes in the city are expected to depreciate by 2.5% in the next 12 months. Home buying in Atlantic City isn’t looking like a good bet right now.
