Veros Real Estate Solutions has released research for home price appreciation in Red and Blue States across the nation by the end of 2020. According to the Q4 2019 VeroFORECASTSM, home prices in the largest 100 markets should increase an average of 3.9 percent by Q4 2020.

As the country prepares for the New Hampshire primary and Iowa caucus, Veros compared projected home price appreciation along party lines for 2020, Veros announced in a press release.

The average appreciation in Blue states is forecast to be just 3.5 percent, while the average appreciation for Red states is projected to be over a percentage point higher at 4.6 percent.

This is partially because of stagnant population growth in many Blue states, such as Illinois, Connecticut and New York. On the other side of the aisle, Red states such as Idaho, Arizona and Utah are experiencing population growth which is resulting in high demand and relatively strong home price appreciation, the release stated.

The VeroFORECAST’s top five performing states were Idaho (9.3 percent), Arizona (7.20 percent), Utah (6.20 percent), Wyoming (5.80 percent) and Nebraska (5.80 percent).

The bottom five performing states were Vermont (2.40 percent), Hawaii (2.20 percent), New York (2.20 percent), Connecticut (1.00 percent) and Illinois (0.70 percent).

Through the analysis, Veros observed that 20 of the top 25 states with strong home price appreciation were Red or Red-leaning states. For the bottom 26 states (including the District of Columbia), 15 of them were Blue or Blue-leaning states.

In addition to low or no population growth and outmigration happening in many Blue states, another potentially contributing factor that has hampered price appreciation is the $10,000.00 cap on the State and Local Tax deduction (SALT).

“In markets where these taxes are high, particularly in New York, New Jersey, California and Connecticut values are flat or very slow to appreciate in 2020,” Veros said.

In an election year, a lot of attention is paid to trends occurring in national economic models. Recently, the VeroFORECAST home price model has seen a shift away from coastal states that traditionally led the country in home price appreciation.

“For years, we saw states with high population centers like California and New York dominating home price escalation,” Eric Fox, Veros vice president of Statistical and Economic Modeling, said in the release. “We are now seeing states like Idaho and Arizona leading the way. Outmigration from the coasts to the interior of the nation is undeniable.

Veros Real Estate Solutions is an industry leader in enterprise risk management and collateral valuation services.