Forecast: O.C. home prices up 2.2% in year

by Jon Lansner, Lansner on Real Estate Blog

Orange County home prices will rise 2.2% in the year ended September 2011, according to the latest forecast from housing tracker Veros from Santa Ana.

Eric Fox, Veros’ economic modeling VP, says “affordability is the driver” that will keep local housing prices up. Previously, Veros’ forecast that home price will be up 1.8% in the year ending June 2011.

To Fox, local home affordability – a mix of depressed values and cheap mortgage rates — will largely offset the area’s weak job market. Fox also think rent-seeking investors will play a big role in supporting local home prices, as these cash-rich buyers won’t have the tall hurdles — overall angst or loan qualification challenges — that currently chill some buyers seeking their own shelter.

Nationwide, the strongest major markets by Veros’ forecasting math in the year ending September 2101 will be …

  1. Houston, +3.8%
  2. Dallas-Fort Worth, +2.7%
  3. Amarillo, Texas,, +2.7%
  4. Anchorage, +2.7%
  5. Davenport, Iowa, +2.7%

Fox says in the report: “Texas is looking strong, with four of the top ten markets in the appreciation forecast … California markets are less robust than in previous quarterly updates, but remain steady.”

The weakest in Veros’ forecast for the 12 months anding Sptember 2011?

  1. Port St. Lucie, Fla., -7.2%
  2. Reno, -7.0%
  3. Orlando, -6.3%
  4. Las Vegas, -6.1%
  5. Deltona, Fla.  -6.0%

Fox offer a glimmer of hope for these markets, saying “Reduced depreciation rates are better news for Florida and Nevada.”

Overall, Fox concludes: “There are tangible indications that things are getting better as time moves on.”

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