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By Real Estate Advisor
There has been a shift in the risk of home price reductions in the U.S. towards Florida and California and some areas of the southwest, according to the PMI Mortgage Insurance Co.’s Summer 2007 U.S. Market Risk Index. The index ranks the 50 largest metropolitan statistical areas in the U.S. according to the risk of home price reduction in the next two years.
On an average, the 50 MSAs scored 346, which is 34.6 % possibility that home prices will reduce in the next two years. The PMI risk index model has been updated this year with the inclusion of the recent price volatility in the market. Also this year’s index includes risk ranking where in MSAs with consistent characteristics are grouped under the same rank. Thus we have Riverside, CA, Phoenix, AZ, Las Vegas, NV, and West Palm Beach, FL group ranked on the top of the index having about 60 % chance of home price reductions in the next two years. Five MSAs in California – Los Angeles, Santa Ana, Oakland, Sacramento and San Diego in California, and four in Florida – Orlando, Fort Lauderdale, Miami and Tampa, feature among the top 11 that face a home price decline of more than 50 %.
Home price appreciation rates have slowed in almost all the 50 largest MSAs. The number of MSAs that saw a home appreciation in the double digits in the first quarter of 2007 has declined to five, way below last year’s 26.
Markets which have had a history of price volatility are more likely to experience home price decline in the future, according to Mark F. Milner, PMI’s Chief Risk Officer. Still with all these going ons, it is not a bad time to buy a home as a long term investment as long as buyers pick their mortgage package with care and have realistic expectations of their properties appreciation.
The following are the top 15 metro areas that are likely to experience home price declines in the next two years, with their group ranks at the front, and scores at the end.
1 Riverside-San Bernardino-Ontario, CA – 652
1 Phoenix-Mesa-Scottsdale, AZ – 646
1 Las Vegas-Paradise, NV – 614
1 West Palm Beach-Boca Raton-Boynton Beach, FL – 607
2 Los Angeles-Long Beach-Glendale, CA – 586
2 Santa Ana-Anaheim-Irvine, CA – 577
2 Oakland-Fremont-Hayward, CA – 572
2 Orlando-Kissimmee, FL – 563
2 Sacramento-Arden-Arcade-Roseville, CA – 560
2 San Diego-Carlsbad-San Marcos, CA – 555
2 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL – 542
2 Miami-Miami Beach-Kendall, FL – 524
2 Tampa-St. Petersburg-Clearwater, FL – 506
2 Boston-Quincy, MA – 501
2 Washington-Arlington-Alexandria, DC-VA-MC – 500
Be sure to contact a local Realtor if you are thinking about buying or selling a home, condo, or any other real estate.
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San Diego CondosCarmel Valley Real EstatePoint Loma Real Estate
Source:
isnare.com
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