Magazine article Mortgage Banking

Northern CA Supply Shortages Fuel Home-Price Gains

Magazine article Mortgage Banking

Northern CA Supply Shortages Fuel Home-Price Gains

Article excerpt

Veros Real Estate Solutions, Santa Ana, California, released its latest VeroFORECAST on July 15 and the 12-month outlook calls for three metro markets to post 10 percent or better home-price gains. Two of the three markets are in northern California--San Jose-Sunnyvale-Santa Clara, CA (+10.6 percent) and San Francisco-Oakland-Fremont, CA (+10.5 percent)

"San Jose housing supplies are down and San Francisco is seeing a serious housing shortage," said Eric Fox, Veros' vice president of statistical and economic modeling, and developer of VeroFORECAST.

Fox noted that inventories in both northern California markets are down 70 percent from their peak in 2008. He added, "Demand is outstripping supply, leading to price run-ups and decreased affordability despite low interest rates."

Rounding out the top five projected strongest markets over the next 12-month period are Austin-Round Rock, TX (+10 percent); San Diego-Carlsbad-San Marcos, CA (+9 percent); and Houston-Sugar Land-Baytown, TX (+8.9 percent).

Veros' future home-price index (HPI) projects, on average, that prices for the top 100 metro areas will climb by 2.5 percent over the next 12 months ending June 1, 2015. That number was down from last quarter's 3. …

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