Three-quarters of those markets are expected to see home prices improve, but 25% will see further declines.
Veros believes the five markets which will see the most improvement are: Los Angeles-Long Beach-Santa Ana, up 11.8%; San Francisco-Oakland-Fremont, up 11.3%; Phoenix-Mesa-Scottsdale, up 10.8%; San Jose-Sunnyvale-Santa Clara, Calif., up 10.5%; and Midland, Texas, up 9.9%.
Eric Fox, vice president of statistical and economic modeling for Veros, explained, “In each of the markets registering among our top 10, it is the combination of low supply, great historic affordability and low interest rates that are pushing these markets to top performing positions.”
The Los Angeles market is forecast to be the nation’s top performer for the next 12-month period, with an upswing stemming from a significantly reduced housing supply that is down more than 70% from its 2007 peak. San Francisco, which appears in the second position of the forecast, is experiencing a serious housing shortage with supply down nearly 80% from its high in 2008.
The market which will see the most depreciation is Atlantic City, N.J., where values are expected to drop 4.2%. Mortgage delinquencies have jumped in Atlantic City, which was damaged by Hurricane Sandy late last year, and unemployment is a very high 14.1%, Veros said.
The cities rounding out the worst of the weak markets are: Poughkeepsie-Newburgh-Middletown, N.Y., where values are expected to decline by 3.0%; Gulfport-Biloxi, Miss., down 2.3%; Pascagoula, Miss., down 2.2%; and Deltona-Daytona Beach-Ormond Beach, Fla., down 2.1%. These markets also suffer from high delinquency/foreclosure rates and high unemployment.
“What we’re seeing from here is that the recovery in the housing market is forecast to continue to accelerate and do so quite significantly in comparison to the previous quarter,” Fox said. Appreciation is now the norm, and the number of weak markets is consistent with what should be in a healthy and recovering market.