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