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Is real estate appreciation shifting west?

Just as America's population growth moved west from the Atlantic, real estate appreciation is trending in that direction, too. The report from Veros Real Estate Solutions predicts that, while U.S. residential real estate will rise at a national average of +4.4% over the next 12 months, a tenth-of-a-percent uptick over the previous quarter's report, the top markets are all between +9.1% and +11.1% – and all between the Rockies and the Pacific. Although Las Vegas has dropped out of the top 10, the Carson City MSA has leapt in and the Reno-Sparks market leapt up from tenth to sixth. Add in Utah and Colorado and you have 21 of the top 25 markets. Seattle-Tacoma-Bellevue, Washington (+11.1%) Olympia, Washington (+9.8%) Bremerton-Silverdale, Washington (+9.8%) San Jose-Sunnyvale-Santa Clara, California (+9.5%) Carson City, Nevada (+9.5%) Reno-Sparks, Nevada (+9.5%) Mount Vernon-Anacortes, Washington (+9.4%) Pocatello, Idaho (+9.4%) San Francisco-Oakland-Fremont, California (+9.2%) Eugene-Springfield, Oregon (+9.1%) Further evidence of the geographic tilt to rising and falling values is that the nine markets predicted to depreciate are primarily in the East and South. Looking at the very top markets, the three highest-appreciating MSAs through May 2019 are expected to be Washington's Seattle-Tacoma-Bellevue, with a predicted rate of 11.1% (unchanged from first quarter 2018), and Olympia and Bremerton-Silverdale, both at +9.8%. Washington-based economist Matthew Gardner, of Windermere Real Estate, attributes this strength to “a thriving economy and a lack of buildable land.” He adds that the in-migration of technology workers is helping fuel the growing demand for housing. This latest report used data from 354 MSAs, 1,005 counties, and 13,877 ZIP codes, an increase across all categories from the previous report. These residences in these markets house 82% of the U.S. population. In the top markets the housing supply is very low, so prices are expected to increase significantly.