A new VeroFORECAST just released for Q4 2018 predicts that 18 housing markets in the US will ride the bottom wave in home value depreciation by the end of December 2019. This is twice the number of depreciating housing markets VeroFORECAST predicted in Q3 2018.
These 18 housing markets predicted to drop in terms of home values by the end of December 2019 represents 5% of all MSAs analyzed by VeroFORECAST, plus 13,870 zip codes, 1,004 counties and the residences for 82% of the country’s population. The VeroFORECAST report suggests “…a .-5% in average appreciation for residential property in the nation’s largest 100 markets, down from -4.6% average appreciation in Q3 2018 to a predicted -3.9% average appreciation in Q4 2018 analysis,” according to HousingWire.
Obviously, this predicted change in depreciated home values is significant from one quarter to the next however, the VeroFORECAST report does not signal a market crash. Its report data instead points to strong market fundamentals and a healthy overall market with its lowest market projection remaining in the same general range of -2.0% – -3.0%/year as Q3 2018.
Farmington NM is predicted to depreciate the most in terms of home values during 2019. VeroFORECAST expects its home values to lose -2.6% during this year. (Incidentally, Farmington is the only city located in the Western US predicted to lose home valuation.) Danville IL, one of four MSAs in Illinois among the 18 housing markets to depreciate the most in 2019, is projected to lose -1.4% in home valuation.
VeroFORECAST points to limited housing supply and slow/declining population growth (low demand) as the two main contributors to home value depreciation. States most affected by these two factors are Illinois, Louisiana, New Mexico, North Dakota, Maryland and Connecticut.
Here are the “bottom riders” in VeroFORECAST’s Q4 2018 housing markets:
- Farmington NM -2.6%
- Danville IL -1.4%
- Decatur IL -1.0%
- Peoria IL -1.0%
- Grand Forks ND-MN -0.8%
- Springfield IL -0.6%
- Cumberland MD-WV -0.5%
- Shreveport-Bossier City LA -0.5%
- Lafayette LA -0.4%
- Bridgeport-Stamford-Norwalk CT -0.4%