San Antonio Market Still Considered A Low Risk
October 2, 2008
PMI Mortgage Insurance Co., the primary U.S. subsidiary of The PMI Group, Inc., today released its Fall 2008 U.S. Market Risk Index(SM), which shows increases in foreclosures and unemployment have significantly heightened the risk of future home price declines. PMI’s U.S. Market Risk Index(SM) ranks the nation’s 50 largest metropolitan statistical areas (MSAs) according to the likelihood that home prices will be lower in two years.
Risk scores translate directly into an estimated percentage risk that home prices will be lower in two years. The Fall 2008 Risk Index is based on second-quarter Office of Federal Housing Enterprise Oversight (OFHEO) data. A complete copy of the Fall 2008 PMI Economic and Real Estate TrendsSM (ERET) report and an appendix that provides data for all 381 U.S. MSAs is available at: http://www.pmi-us.com/eret.
The risk of future price declines rose by more than 10 percent in 16 of the nation’s top 50 MSAs, primarily in areas of the country that experienced major increases in house prices during the housing boom. Only two MSAs — Cambridge-Newton-Framingham, MA and Boston-Quincy, MA — saw their risk decrease by more than one percent. Among the top 50 MSAs, 17 ranked in the highest risk category and 16 of those were in California, Florida, Nevada, and Arizona.
“The risk of future home price declines increased in 94 percent of all 381 MSAs in the country this quarter,” said David Berson, PMI’s Chief Economist and Strategist. “The majority of these increases aren’t statistically significant, in many cases risk increased by less than ten percent, but risk did increase by a significant amount — as much as 30 percent or more — in some states and MSAs where foreclosures and unemployment increased significantly.”
The highest risk of future price declines remains in Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (99.5 percent), Riverside-San Bernardino-Ontario, CA (99.5 percent), Orlando-Kissimmee, FL (99.4 percent), Miami-Miami Beach-Kendall, FL (99.3 percent), Tampa-St. Petersberg-Clearwater, FL (99 percent). The areas with the lowest risk of price declines — less than one percent — are in Fort Worth-Arlington, TX, Dallas-Plano-Irving, TX, Houston-Sugar Land-Baytown, TX, Austin-Round Rock, TX and San Antonio, TX.
Housing affordability also failed to improve this quarter, according to PMI’s proprietary Affordability Index(SM), which measures how affordable homes are today in a given MSA relative to a baseline of 1995. An Affordability Index score exceeding 100 indicates that homes have become more affordable while a score below 100 means they are less affordable.
Across the nation, 40 percent of the nation’s 381 MSAs showed increased affordability; while 60 percent of all MSAs experienced declines in affordability. Affordability remains challenged in 14 of the 17 MSAs with risk scores in the highest risk ranks. Home prices in these areas will need to fall further in order to move back in line with incomes before there will be meaningful reductions in risk scores.
In addition to the PMI U.S. Market Risk Index showing the risk of price declines, PMI’s Fall 2008 ERET examines major changes in the mortgage origination trends as well as the impact foreclosures and unemployment are having on home prices in the second quarter of 2008.
PMI Fall 2008 PMI U.S. Market Risk Index
Rank MSA Score
1 Fort Lauderdale-Pompano Beach-Deerfield Beach; FL A 99.5
1 Riverside-San Bernardino-Ontario; CA 99.5
1 Orlando-Kissimmee; FL 99.4
1 Miami-Miami Beach-Kendall; FL 99.3
1 Tampa-St. Petersburg-Clearwater; FL 99.0
1 Las Vegas-Paradise; NV 98.5
1 Los Angeles-Long Beach-Glendale; CA 98.5
1 Santa Ana-Anaheim-Irvine; CA 97.7
1 Jacksonville; FL 97.5
1 Phoenix-Mesa-Scottsdale; AZ 96.3
1 Sacramento-Arden-Arcade-Roseville; CA 96.3
1 San Diego-Carlsbad-San Marcos; CA 95.9
1 Oakland-Fremont-Hayward; CA 94.4
1 San Jose-Sunnyvale-Santa Clara; CA 87.1
1 Providence-New Bedford-Fall River; RI-MA 72.4
1 San Francisco-San Mateo-Redwood City; CA 71.6
3 Edison-New Brunswick; NJ 35.1
3 Nassau-Suffolk; NY 29.4
3 Washington-Arlington-Alexandria; DC-VA-MD-WV 26.0
3 Virginia Beach-Norfolk-Newport News; VA-NC 25.4
4 Detroit-Livonia-Dearborn; MI 17.8
4 Minneapolis-St. Paul-Bloomington; MN-WI 14.8
4 Newark-Union; NJ-PA 14.4
4 Baltimore-Towson; MD 10.1
5 New York-White Plains-Wayne; NY-NJ 9.8
5 Boston-Quincy; MA 7.7
5 Warren-Troy-Farmington Hills; MI 7.3
5 Portland-Vancouver-Beaverton; OR-WA 6.4
5 Chicago-Naperville-Joliet; IL 6.3
5 Atlanta-Sandy Springs-Marietta; GA 3.5
5 Seattle-Bellevue-Everett; WA 2.3
5 Philadelphia; PA 2.1
5 Cambridge-Newton-Framingham; MA 1.6
5 Nashville-Davidson-Murfreesboro-Franklin; TN 1.6
5 Cleveland-Elyria-Mentor; OH 1.1
5 St. Louis, MO-IL <1
5 Milwaukee-Waukesha-West Allis; WI <1
5 Charlotte-Gastonia-Concord; NC-SC <1
5 Cincinnati-Middletown; OH-KY-IN <1
5 Denver-Aurora; CO <1
5 Columbus; OH <1
5 Austin-Round Rock; TX <1
5 Kansas City; MO-KS <1
5 Indianapolis-Carmel; IN <1
5 Memphis, TN-MS-AR <1
5 San Antonio; TX <1
5 Pittsburgh; PA <1
5 Houston-Sugar Land-Baytown; TX <1
5 Dallas-Plano-Irving; TX <1
5 Fort Worth-Arlington; TX <1
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