U.S. Home Prices to Fall Through 2011’s First Quarter (Bloomberg News)

[ravinos]

California has 5 of the top 15 according to the economist in this article, with San Diego included.

http://www.bloomberg.com/apps/news?pid=20670001&sid=aEwbzPfaEGw8

July 7 (Bloomberg) — Home prices may fall in more than half of the largest U.S. cities through the first quarter of 2011 as unemployment and foreclosures rise, mortgage insurer PMI Group Inc. said.

Thirty of the 50 biggest metropolitan areas have at least a 75 percent chance of lower prices through March 31, 2011, Walnut Creek, California-based PMI said in a report today. The decline is likely to spread to “all regions of the nation” from California, Florida, Nevada and Arizona, the states most affected by the housing slump, PMI said.

“The housing market has been hit by a demand shock of high unemployment and a supply shock of distressed foreclosure sales,” LaVaughn Henry, senior economist at PMI, the fourth- largest U.S. mortgage insurer, said in an interview.

Unemployment rose to 9.5 percent in June, bringing the total number of jobs lost to 6.5 million since December 2007, the Labor Department said July 2. Foreclosure filings may hit a record 1.8 million in the first half of the year as more jobless homeowners default on their loans, real estate data service RealtyTrac Inc. said last month.

Home prices in 20 major U.S. metropolitan areas dropped 18.1 percent in April from a year earlier, following an 18.7 decrease in March, according to the S&P/Case-Shiller index. Prices are forecast to fall 41.7 percent from their peak, Deutsche Bank AG analysts led by Karen Weaver wrote in a June 15 report.

Florida Drops Predicted

“Affordability is no longer the driving issue in the housing market, and we believe prices still have a ways to fall in many areas before home prices reach their trough,” the Deutsche Bank analysts wrote.

The 15 areas with the highest probability of lower prices in 2011 each have a 99 percent chance, PMI said. They include Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa and Jacksonville in Florida; Riverside, Los Angeles, Santa Ana, Sacramento and San Diego in California; Las Vegas; Phoenix; Providence, Rhode Island; and Detroit.

Edison and Newark, in New Jersey, have a 97 percent and 96 percent chance, respectively. Nassau, New York, has a 92 percent chance. New York City showed an 88 percent chance of lower prices, according to PMI.

“The New York area has gone from a moderate level to an elevated level because of the big hit from the financial crisis,” Henry said.

Declines Predicted

Washington showed a 92 percent chance of lower prices; Portland, Oregon, and Baltimore each have 90 percent; Atlanta has 81 percent; Boston has an 80 percent chance; San Jose, California has 78 percent; and Minneapolis has a 75 percent chance, PMI said.

The probability of lower prices is 66 percent in the San Francisco area; 58 percent in Warren, Michigan; 46 percent in Seattle; 45 percent in Milwaukee; 41 percent in Cambridge, Massachusetts; 36 percent in Chicago; and 30 percent in Philadelphia, according to PMI.

The areas with the least chance of lower prices, each with less than a 6 percent probability, include Cleveland; Pittsburgh; Columbus, Ohio; San Antonio; Houston; Dallas, and Fort Worth, Texas, according to PMI.

The insurer compiles its “market risk” index from income, interest-rate, home-price and affordability data going back to the early 1980s.

To contact the reporter on this story: Dan Levy in San Francisco at [email protected]
Last Updated: July 7, 2009 12:45 EDT

[5yearwaiter]

WoW!! San Diego price decline have a 99% chances – not a surprise as per several in this forum-

[5yearwaiter]

WoW!! San Diego price decline have a 99% chances – not a surprise as per several in this forum-

[5yearwaiter]

WoW!! San Diego price decline have a 99% chances – not a surprise as per several in this forum-

[5yearwaiter]

WoW!! San Diego price decline have a 99% chances – not a surprise as per several in this forum-

[5yearwaiter]

WoW!! San Diego price decline have a 99% chances – not a surprise as per several in this forum-

[(former)FormerSanDiegan]

This company has been publishing this index for a while. It is interpreted as the percent chance that an area will experience lower prices in two years.

Let’s see what they said 2 years ago:

In the Summer of 2007, the percent chance of San Diego experiencing lower prices was … 55.5%.

I don’t know what to make of this index, it appears to be good at projecting recent past data into the future. That’s about it.

There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995.

* Reference – Pages 6-7 of the “2nd Quarter 2009 Economic and Real Estate Trends Report” found here:

http://phx.corporate-ir.net/phoenix.zhtml?c=63356&p=irol-publications

[(former)FormerSanDiegan]

This company has been publishing this index for a while. It is interpreted as the percent chance that an area will experience lower prices in two years.

Let’s see what they said 2 years ago:

In the Summer of 2007, the percent chance of San Diego experiencing lower prices was … 55.5%.

I don’t know what to make of this index, it appears to be good at projecting recent past data into the future. That’s about it.

There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995.

* Reference – Pages 6-7 of the “2nd Quarter 2009 Economic and Real Estate Trends Report” found here:

http://phx.corporate-ir.net/phoenix.zhtml?c=63356&p=irol-publications

[(former)FormerSanDiegan]

This company has been publishing this index for a while. It is interpreted as the percent chance that an area will experience lower prices in two years.

Let’s see what they said 2 years ago:

In the Summer of 2007, the percent chance of San Diego experiencing lower prices was … 55.5%.

I don’t know what to make of this index, it appears to be good at projecting recent past data into the future. That’s about it.

There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995.

* Reference – Pages 6-7 of the “2nd Quarter 2009 Economic and Real Estate Trends Report” found here:

http://phx.corporate-ir.net/phoenix.zhtml?c=63356&p=irol-publications

[(former)FormerSanDiegan]

This company has been publishing this index for a while. It is interpreted as the percent chance that an area will experience lower prices in two years.

Let’s see what they said 2 years ago:

In the Summer of 2007, the percent chance of San Diego experiencing lower prices was … 55.5%.

I don’t know what to make of this index, it appears to be good at projecting recent past data into the future. That’s about it.

There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995.

* Reference – Pages 6-7 of the “2nd Quarter 2009 Economic and Real Estate Trends Report” found here:

http://phx.corporate-ir.net/phoenix.zhtml?c=63356&p=irol-publications

[(former)FormerSanDiegan]

This company has been publishing this index for a while. It is interpreted as the percent chance that an area will experience lower prices in two years.

Let’s see what they said 2 years ago:

In the Summer of 2007, the percent chance of San Diego experiencing lower prices was … 55.5%.

I don’t know what to make of this index, it appears to be good at projecting recent past data into the future. That’s about it.

There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995.

* Reference – Pages 6-7 of the “2nd Quarter 2009 Economic and Real Estate Trends Report” found here:

http://phx.corporate-ir.net/phoenix.zhtml?c=63356&p=irol-publications

[patientrenter]

[quote=FormerSanDiegan]…..There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995…..[/quote]

Affordability as measured here can be misleading. Prices are higher than in 1995, even when compared to wages. So homes are less affordable for cash buyers. But if you’re paying using other people’s money, and don’t plan to repay it any time soon, then lower interest rates makes a purchase more affordable.

[patientrenter]

[quote=FormerSanDiegan]…..There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995…..[/quote]

Affordability as measured here can be misleading. Prices are higher than in 1995, even when compared to wages. So homes are less affordable for cash buyers. But if you’re paying using other people’s money, and don’t plan to repay it any time soon, then lower interest rates makes a purchase more affordable.

[patientrenter]

[quote=FormerSanDiegan]…..There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995…..[/quote]

Affordability as measured here can be misleading. Prices are higher than in 1995, even when compared to wages. So homes are less affordable for cash buyers. But if you’re paying using other people’s money, and don’t plan to repay it any time soon, then lower interest rates makes a purchase more affordable.

[patientrenter]

[quote=FormerSanDiegan]…..There are other interesting things in their report.

Their affordability index for San Diego for 1Q 2009 is 131*. This index is based on affordability relative to 1995. The interpretation is that housing in SD in 1Q 2009 was significantly more affordable than in 1995…..[/quote]

Affordability as measured here can be misleading. Prices are higher than in 1995, even when compared to wages. So homes are less affordable for cash buyers. But if you’re paying using other people’s money, and don’t plan to repay it any time soon, then lower interest rates makes a purchase more affordable.

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