Recoveries Look Modest into 2011, But Then Could Improve

Many housing markets could see stronger recoveries two years from now even though the latest forecast for the coming year shows only modest ones, according to one company's forecast. Although there aren't any overwhelmingly strong appreciating forecasts in the near term, the depreciating ones are milder than they were a year ago, according to Veros Real Estate Solutions, a collateral valuation provider based in Santa Ana, Calif. In its quarterly forecast update for June 2010 through June 2011, Veros said California's Inland Empire area, including Riverside, San Bernardino and Ontario, is seeing modest appreciation, joining the state's strongest metro region, San Diego. "Colorado is beginning to look good again to buyers, with three cities among the top 10," said Eric Fox, Veros' vice president of statistical and economic modeling. "A new entry among the top five positive trending areas is Louisiana's Shreveport and Bossier City area." Chico, Calif. leads the list of weakening markets, but Florida continues its depreciation trend in many areas along its East Coast. Nevada's second largest market, Reno/Sparks, stays on the list of weakest markets while Las Vegas avoided inclusion. Utah did not, however; the Salt Lake City and nearby Provo/Orem areas occupy the last two slots in Veros' bottom 10. Fox said while the Houston metro area is also demonstrating modest improvement, at this point the company can only speculate on the effects, if any, that will result in the residential real estate market from the catastrophic BP oil spill in the Gulf. The company said none of its ZIP code level models for the impacted coastal areas have yet shown significant forecast differences from those ZIP code models that are further inland and less impacted. Real estate values in the Central Plains areas are expected to hold steady in the coming year. Texas, Oklahoma, Kansas, Nebraska and parts of Louisiana and Arkansas are holding steady, underscoring a weak but consistent mild recovery.