The coming year will see a considerable slowdown in home price growth, according to valuations provider Veros Real Estate Solutions.
The latest VeroFORECAST predicts an average appreciation of 3.9% over the next year in the 100 most populous markets surveyed – down from the 4.5% predicted last quarter.
“This amount of change from one quarter to the next is significant,” said Eric Fox, VP of Statistical and Economic Modeling at Veros. “While the market fundamentals remain solid and we still expect the overall housing market to remain healthy, there is a definite slowing down of most markets from last quarter’s update.”
Fox said Veros does not foresee a crash, “but simply a slowing down as the strength of the past few years is expected to dissipate somewhat in most markets.”
The report says housing supply and interest rates are key factors contributing to the softening.
“Overall, interest rates appear to be softening the forecasts in many markets by 1-2% over what they would have been had the flat interest rate environment continued as it has for the past several years,” Fox said. “At the same time, housing supply is a key discriminator between our top and bottom forecast performing markets.”
Among the top 10 markets expected to appreciate the most, the rate of appreciation has fallen two full points, with the average rate falling from 10.3% to 8.3%.
Here are the markets projected to appreciate the most through Dec. 1, 2019:
The bottom of the list is also seeing a change. Now, 18 markets – twice as many as last quarter – are projected to depreciate this year, and the average rate of depreciation has increased from -0.58% to -0.92%.
Here are the bottom 10 markets: