As home price growth slows, inventory dwindles and residential sales decline, it’s clear the housing market has entered a slowdown.
And although several reports indicate an oncoming rebound this spring, a new analysis from Veros Real Estate Solutions suggests the downturn is likely to last until 2020.
According to the company’s data, homes in the nation’s 100 largest markets are projected to appreciate at a rate of 3.7% over the next 12 months, eventually ending by March 1, 2020.
While a majority of the nation’s housing markets are forecasted to cool down, Veros claims metros in California and Louisiana will be disproportionately impacted.
“Among the states where predictions raise concern are Louisiana, which has half of the ten markets at the bottom of the report’s 100 most-populous markets, and California,” Veros writes. “The Golden State is expected to continue softening significantly with forecast appreciation for both the Los Angeles and San Diego markets falling well under 5%. The Bay Area is expected to fare only slightly better, with appreciation just above 5%, well below its double-digit readings in the recent past.”
These appreciation declines have encouraged Veros to reduce its overall market forecast down from 3.9% last quarter to 3.7% this quarter.
Despite this downturn, Veros VP of Statistical and Economic Modeling Eric Fox says the decline shouldn’t signal an impending crash.
“We do not see a significant depreciation, but simply a slowing down of most markets. The overall housing market is still expected to remain healthy as the fundamentals remain solid including historically low interest rates and a strong economy with low unemployment rates,” Fox said. “Nevertheless, the strength of the past few years is expected to dissipate somewhat in most markets.”
Here are the top five strongest markets predicted by Veros:
5. Olympia, Washington, with a forecasted appreciation of 7.6%
4. Bellingham, Washington, with a forecasted appreciation of 7.8%
3. Boise City-Nampa, Idaho, with a forecasted appreciation of 8.7%
2. Odessa, Texas, with a forecasted appreciation of 8.8%
1. Idaho Falls, Idaho, with a forecasted appreciation of 10.2%
Here are the top five weakest markets predicted by Vero:
5. Lafayette, Louisiana, with a forecasted appreciation of -0.7%
4. Baton Rouge, Louisiana, with a forecasted appreciation of -0.8%
3. Danville, Illinois, with a forecasted appreciation of -1.1%
2. Hammond, Louisiana, with a forecasted appreciation of -1.2%
1. Alexandria, Louisiana, with a forecasted appreciation of -1.9%
