Recovery Will Slow in 2016 as Fewer Homes Gain Value; Depreciation Will Also Fall

Dec 21, 2015, 10:00 ET from Weiss Analytics

NATICK, Mass., Dec. 21, 2015 /PRNewswire-USNewswire/ -- The number of homes nationwide gaining value on a monthly basis are expected to fall by 12 percent over the next 10 months as the housing recovery slows. Just over half, 51.3 percent, of America's homes will continue to appreciate by October 2016, according to forecasts by Weiss Analytics.

The percentage of homes losing value nationwide are expected to decline, but fewer than the decline in appreciating homes.  Some 23.2 percent of homes are expected to depreciate on a monthly basis, a 6.4 percent drop from October 2015.

The forecasted decline in appreciating homes will continue a multi-year decline.  Since July 2014, the percentage of appreciating homes has fallen from 65.2 percent to 58.4 percent in October 2014 despite a 4.5 percent uptick in August.  The Weiss forecast predicts a 21 percent decline over a 27-month period in the number of homes nationwide that are gaining value on a monthly basis.

Among the metros forecasted to be among the top ten appreciating markets in the nation by October 2016 are several that suffered some of the greatest losses in median home prices when the housing bubble burst in 2007.  These include Reno NV, forecast to have 98.3 percent of its homes appreciating on a monthly basis; Cape Coral-Fort Myers, FL, forecast to have 93 percent of homes appreciating; Stockton-Lodi, forecast to have 89.1 percent of homes appreciating; Phoenix-Mesa-Scottsdale, AZ, to have 84.4 percent of homes appreciating and Myrtle Beach-Conway-North Myrtle Beach, SC-NC, to have 83.3 percent of homes appreciating.

Metros that will have the lowest appreciation rates in October 2014 are all from the South and Midwest. Raleigh, NN will have the lowest appreciation rate of 1.2%.  Only 3,757 of the 306,901 Raleigh homes in the Weiss database will be gaining value on a monthly basis.

"During the past three years the recovery has generated year over year double digit annual price increases.[1] Our data and analytics show that the pace of change in home values is slowing down—both among homes that are losing value as well as those that have been appreciating.  This retrenchment may delay the return to price parity in some markets but it in others it will help to prevent the formation of bubbles of overvalued properties that could result in defaults," said Allan Weiss, CEO and founder of Weiss Analytics and former CEO and co-founder of Case Shiller Weiss.

To create its accuracy-tested forecasts, Weiss Analytics' applies big data techniques, novel algorithms to precisely estimate future residential values in its database of 45 million house-specific repeat sales indexes.  Each house in the database receives a prior value trend--the WRR indexed value (retail value of home based on all other indexed homes) -- and a twelve-month forward prediction of where the value will move by percentage.  Weiss forecasts are used to value and rate real estate assets by leading securities and real estate investors and by bond eating firms.

The data from Weiss Analytics is incorporated in Owners.com's Trend Tracking Tool™, where consumers can uncover the pricing trends that are shaping the future of their neighborhoods.  Consumers can also see recent value changes and one year forecasts for 5500 Zip codes and 100 metros at http://www.weissindex.com/.

About Weiss Analytics
Weiss Analytics provides the next generation of home price indexing, forecasting, and analytics and is the only provider of house-specific repeat sales indexes in the US. Founded by national housing index expert Allan N. Weiss, co-founder of Case Shiller Weiss, Weiss Analytics combines leading industry experience, proprietary analytics, and state-of-the-art big data computing power to deliver revolutionary products with unprecedented resolution. Our unique tools power better decision-making and help mitigate the financial risk of home ownership and investments. Weiss Analytics is an independent and trusted information source for home buyers and sellers, real estate professionals, financial institutions, and hedge funds.

Find out more about Weiss Analytics, go to https://www.weissanalytics.com

National Percentages of Appreciating and Depreciating Homes

Actual and Forecasted


October 2016

Forecast

October 2015

Actual

2015-2016

Change

October 2014

Actual

2014-2016

Change

 

Total Appreciating

51.3%

58.4%

-12.2%

64.8%

-20.8%

 

Total Depreciating

23.3%

24.9%

-6.4%

14.7%

+8.6%

Top Ten Appreciating Metros October 2016 (Forecasted)

Metro

Appreciating

Total database

Percent

Lansing-East Lansing, MI

24,750

24,750

100.0%

Reno, NV

55,433

56,418

98.3%

Green Bay, WI

61,342

65,626

93.5%

Cape Coral-Fort Myers, FL

183,361

197,117

93.0%

Salisbury, MD-DE

70,874

77,872

91.0%

Stockton-Lodi, CA

133,959

150,346

89.1%

Augusta-Richmond County, GA-SC

103,297

118,584

87.1%

Phoenix-Mesa-Scottsdale, AZ

937,630

1,110,944

84.4%

Fayetteville-Springdale-Rogers, AR-MO

64,718

77,679

83.3%

Myrtle Beach-Conway-North Myrtle Beach, SC-NC

75,330

90,470

83.3%

Bottom Ten Appreciating Metros October 2016 (Forecasted)

Metro

Appreciating

Total Database

Percent

Greensboro-High Point, NC

28,011

201,889

13.9%

Madison, WI

11,757

87,600

13.4%

Durham-Chapel Hill, NC

11,966

102,501

11.7%

Baton Rouge, LA

12,624

111,797

11.3%

Scranton--Wilkes-Barre--Hazleton, PA

7,083

71,222

9.9%

Little Rock-North Little Rock-Conway, AR

12,032

169,336

7.1%

Birmingham-Hoover, AL

14,674

207,250

7.1%

York-Hanover, PA

2,628

79,010

3.3%

Louisville/Jefferson County, KY-IN

5,575

180,401

3.1%

Raleigh, NC

3,757

306,901

1.2%

Top Ten Appreciating Metros, October 2015

Metro

October 2014

October 2015

Change

Flint, MI

80.1%

100.0%

19.9%

Reno, NV

100.0%

87.4%

-12.6%

Stockton-Lodi, CA

91.7%

85.7%

-5.9%

Port St. Lucie, FL

91.6%

85.0%

-6.6%

San Jose-Sunnyvale-Santa Clara, CA

93.9%

84.7%

-9.2%

Portland-Vancouver-Hillsboro, OR-WA

94.8%

83.7%

-11.1%

Modesto, CA

98.0%

81.3%

-16.7%

Asheville, NC

88.1%

80.6%

-7.5%

Cape Coral-Fort Myers, FL

95.2%

80.2%

-15.1%

San Francisco-Oakland-Hayward, CA

96.5%

79.8%

-16.7%

Bottom Ten Appreciating Metros, October 2015

Metro

October 2014

October 2015

Change

Allentown-Bethlehem-Easton, PA-NJ

50.6%

40.7%

-9.9%

Lancaster, PA

30.9%

39.5%

8.5%

Hartford-West Hartford-East Hartford, CT

27.5%

38.2%

10.7%

Baltimore-Columbia-Towson, MD

29.6%

38.2%

8.6%

Kingsport-Bristol-Bristol, TN-VA

49.5%

34.6%

-14.9%

Trenton, NJ

47.4%

32.9%

-14.4%

Albany-Schenectady-Troy, NY

26.6%

32.3%

5.7%

Davenport-Moline-Rock Island, IA-IL

36.8%

30.8%

-6.0%

Little Rock-North Little Rock-Conway, AR

39.2%

24.9%

-14.3%

Scranton--Wilkes-Barre--Hazleton, PA

26.6%

14.9%

-11.7%

 

[1] http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_121814.pdf

 

SOURCE Weiss Analytics



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