Home prices are forecast to rise an average of 3.1% during the next 12 months, according to Veros Real Estate Solutions' VeroFORECAST report.
The quarterly report predicts that home prices will rise in about 90% of the markets tracked by the end of the second quarter of 2016 – up from 86% in the second quarter.
However, due to cuts in the oil and gas industries over the next year, Veros predicts home values will decrease in certain Texas cities. Houston had an annual forecast of 7.6% in the second quarter, but has seen that decline to 5.7% in the third quarter, the firm reports. Similar decreases will be seen in the Midland and Odessa areas.
The number of Texas cities in the report's top 25 decreased in the second quarter, while the number of Texas cities in the bottom 25 increased, Veros says.
The Dallas and Austin markets, however, are forecast to continue to see strong home price appreciation, according to the report.
The report, which is updated quarterly, covers 976 counties, 338 metro areas and 13,548 ZIP codes.
‘Housing supplies in the top five markets remain tight and, coupled with price run-ups, affordability is becoming an issue,’ says Eric Fox, vice president of statistical and economic modeling for Veros, in a statement. ‘Conversely, the bottom markets continue to reflect the impact of decreasing population trends and continued high unemployment.’
‘We've noticed consistency in the forecast over the last several quarters, especially when compared to forecasts in the 2005-2006 time frame, when the market was forecast to 'overheat',’ Fox adds. ‘During that time, we saw appreciation at levels of 25 percent or more in some of the strongest markets. Now, our strongest markets have consistently been forecast to be in the 10-percent range over the last several quarters.’
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