In the first quarter of 2021, markets in the Western half of the country are anticipated to see the greatest home price growth, according to forecasting by Veros Real Estate Solutions, a real estate valuation company.
Specifically, Boise, Idaho; Spokane, Washington; Idaho Falls, Idaho; and Sierra Vista, Arizona, will see the greatest growth. In the wake of the COVID-19 pandemic and its effects on the market, home prices are expected to increase at half the rate prior to the outbreak.
Earlier forecasts prior to the full outbreak of the pandemic projected a 3.9 percent annual appreciation rate through the end of 2020. Now, Veros anticipates a 1.9 percent annual appreciation rate through Q1 2021, which takes into account rising unemployment and a falling GDP.
Eric Fox | Veros Real Estate Solutions
“The combination of all of these factors results in mild forecast depreciation on average for the next quarter with a return to normal appreciation rates later in the year and into 2021,” Eric Fox, vice president of statistical and economic modeling at Veros, said in a statement.
Veros’ forecasting predicts that Boise will see a 7.6 percent year-over-year price appreciation in Q1 2021. The company’s report also predicts that Spokane will see a price appreciation of 6.4 percent, Idaho Falls 6.3 percent and Sierra Vista 5.8 percent.
About one tenth of all markets will see annual depreciating values in Q1 2021, the report states, an increase from 1.0 percent in Q1 2020. Home prices in Baton Rouge, Louisiana and Chicago are anticipated to fall 2.3 percent, while those in Bridgeport, Connecticut, and Champaign, Illinois, may fall by about 1.5 percent.
Although the prospects of falling home prices may seem bleak, the good news is that because the main contributing factor right now for the current economic downturn was unrelated to the housing market, there’s a good chance the market will recover quickly once the real estate industry gets through this crisis.
“Home price trends and forecasts certainly take a backseat to more pressing health and safety issues during this unprecedented tragedy,” Darius Bozorgi, CEO Of Veros, said in a statement. “While we expect a softening of house prices in the near-term, we anticipate a rebound when the COVID-19 pandemic subsides. The fundamental economic principles under which housing has been operating in recent years are solid. Real estate prices will be poised to recover when we see employment return across the nation.”
