On the horizon: where home values should rise and fall

Ups and downs

Home buyers looking for a place to build equity should look to the northwest. According to new data from Veros, that’s where homes will see the most appreciation over the next year. Home values in the Seattle metro alone are expected to jump 11.1 percent by next March.

All about appreciation

According to the latest VeroFORECAST, the Seattle metro in Washington will have the biggest jump in home values over the next year, rising just over 11 percent.

Eric Fox, VP of statistical and economic modeling at Veros, said its low inventory that’s driving values up.

“The Seattle market remains exceedingly strong due to its extremely low supply of homes, which is at just one month inventory, and a population that grew 22 percent over the last 15 years,” Fox said. “Its unemployment rate of 4.5 percent is slightly higher than the national rate of 4.1 percent.”

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Home values in nearby Bellingham, Kennewick-Pasco-Richland and Mount Vernon-Anacortes, Washington, are also expected to jump around 10 percent. According to Matthew Gardner, an economist with Windermere Real Estate, it’s no surprise that Washington claimed four of the top five spots for appreciation.

“Seattle, in particular, continues to be a popular choice for residents coming from more expensive markets in California,” Gardner said. “In Seattle and the other Washington State metro areas that made this list, the supply of new construction homes is very limited, which puts additional pressure on existing home prices. I don’t expect much to change in 2018; competition for homes will remain strong, resulting in strong sales and rising home prices.”

The only non-Washington metro to make the top five in terms of appreciation was Denver. Values there will likely rise 9.9 percent over the year. Other cities also projected to see above-9 percent jumps in value include Midland, Texas; Bremerton, Washington; Vallejo, California; Eugene, Oregon; and Reno, Nevada.

Where values are dropping

Away from the northeast, a handful of markets may actually see home values depreciate some. Homes in Atlantic City-Hammonton, New Jersey, are forecasted to drop 2.9 percent by next March, while those in Joplin, Missouri, should decrease 1.4 percent.

According to Fox, Atlantic City’s drop is due to unemployment and population loss.

Other metros also expected to see depreciation include Goldsboro, North Carolina; Longview, Texas; Peoria, Illinois; Trenton-Ewing, New Jersey; Springfield, Illinois; Vineland-Millville-Bridgeton, New Jersey; and St. Joseph, Missouri-Kansas.

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Looking to buy a home where you can build equity and net a profit? Then consider these appreciating markets. Make sure to shop around to get the best mortgage rate first.