Homeowners in the majority of housing markets across the country should expect to see home prices continue to appreciate by about 4.5 percent over the next 12 months, and, in a handful of western markets, owners likely will see their prices soar well past that, according to a new report from Veros, a valuation and analytics firm.
Western states hold the top 10 spots in forecasts of appreciation, with home price predictions ranging from 9 to 12 percent over the next 12 months, according to Veros. But other metros outside of the West will see appreciation too. For example, metros within South and North Carolina as well as within some Midwestern state like Michigan and Indiana are expected to perform strong in housing appreciation over the next year. For example, Indianapolis-Carmel, Ind., metro area property values are projected to appreciate at 8.5 percent over the next 12 months.
Veros predicts the following housing markets will appreciate the most through August 2019:
- Bremerton-Silverdale, Wash.: 11.7%
- Boise-Nampa, Idaho: 11.2%
- Las Vegas-Paradise, Nev.: 10.8%
- Bellingham, Wash.: 10.6%
- Olympia, Wash.: 10.3%
- Carson City, Nev.: 10.1%
- Reno-Sparks, Nev.: 10%
- San Francisco-Oakland-Fremont, Calif.: 9.6%
- Denver-Aurora-Broomfield, Colo.: 9.5%
- Seattle-Tacoma-Bellevue, Wash.: 9.3%
Rising average interest rates that are nearing 5 percent, however, remain a chief concern for housing affordability and could start to cool some markets. Eric Fox, vice president of statistical and economic modeling at Veros, says that for many of the markets interest rates do appear to be “softening the third quarter’s forecasts by one to two percent over what would have been in a flat interest rate environment of the past several years continued.”
In some markets, home buyers may get relief from the higher home prices. Markets like Farmington, N.M.; Vineland-Milville-Bridgeton, N.J.; and Danville, Ill., are expected to see home prices ease by 1 to 2 percent over the next 12 months, according to the report.
“Housing supply is a key discriminator between the forecasted top- and bottom-performing markets,” Fox says. “Where the housing supply is very low, as in our top markets, prices are expected to increase significantly. In contrast, for many of the bottom markets, which are in very slow growth metros, housing supply is projected to remain high.”