PMI Real Estate Risk Index Q4 2009

PMI, one of the leading provider of Mortgage Insurance, has issued Q4 2009 Real Estate Risk Index. This report rate the risk of real estate price decline in future among Top 50 MSA (Metropolitan Statical Area). Its evaluation is based on 1) price appreciation/depreciation trend, 2) affordability and 3) unemployment trend.

Here is the ranking and risk index for Top 50 MSA.

- "The riskest" markets are usual suspect markets like Southern California, Inland California, Florida in general, Phoenix and Las Vegas. 21 out of 50 MSA is considered HIGH risk.

- The risk of price decline at 20 out of 50 MSA is considered "Low" or "Minimal" -- at these market, I believe real estate is considered bottomed.

Rank	Metropolitan Stastical Area	Index Q4 2008	Risk
1	Miami-Miami Beach-Kendall FL	99.9	High
2	Riverside-San Bernardino-Ontario CA	99.9	High
3	Fort Lauderdale-Pompano Beach-Deerfield Beach FL	99.9	High
4	Los Angeles-Long Beach-Glendale CA	99.9	High
5	Las Vegas-Paradise NV	99.8	High
6	Tampa-St. Petersburg-Clearwater FL	99.7	High
7	Orlando-Kissimmee FL	99.6	High
8	Santa Ana-Anaheim-Irvine CA	99.0	High
9	Jacksonville FL	98.9	High
10	Phoenix-Mesa-Scottsdale AZ	98.8	High
11	Providence-New Bedford-Fall River RI-MA	98.3	High
12	Sacramento--Arden-Arcade--Roseville CA	97.9	High
13	San Diego-Carlsbad-San Marcos CA	97.2	High
14	Edison-New Brunswick NJ	89.4	High
15	Washington-Arlington-Alexandria DC-VA-MD-WV	88.2	High
16	Detroit-Livonia-Dearborn MI	86.3	High
17	Newark-Union NJ-PA	84.1	High
18	Baltimore-Towson MD	83.8	High
19	Oakland-Fremont-Hayward CA	80.7	High
20	Nassau-Suffolk NY	78.3	High
21	Virginia Beach-Norfolk-Newport News VA-NC	77.6	High
22	New York-White Plains-Wayne NY-NJ	67.6	Elevated
23	Portland-Vancouver-Beaverton OR-WA	66.4	Elevated
24	Minneapolis-St. Paul-Bloomington MN-WI	58.5	Elevated
25	Boston-Quincy MA	56.6	Elevated
26	Atlanta-Sandy Springs-Marietta GA	55.8	Elevated
27	San Jose-Sunnyvale-Santa Clara CA	51.4	Elevated
28	San Francisco-San Mateo-Redwood City CA	31.6	Moderate
29	Seattle-Bellevue-Everett WA	30.3	Moderate
30	Philadelphia PA	27.5	Low
31	Milwaukee-Waukesha-West Allis WI	27.5	Low
32	Cambridge-Newton-Framingham MA	27.3	Low
33	Warren-Troy-Farmington Hills MI	23.6	Low
34	Austin-Round Rock TX	17.4	Low
35	Denver-Aurora CO	14.2	Low
36	St. Louis MO-IL	13.8	Low
37	Chicago-Naperville-Joliet IL	13.7	Low
38	Cincinnati-Middletown OH-KY-IN	12.1	Low
39	Nashville-Davidson--Murfreesboro--Franklin TN	12.0	Low
40	Kansas City MO-KS	11.2	Low
41	Indianapolis-Carmel IN	9.6	Minimal
42	Charlotte-Gastonia-Concord NC-SC	5.7	Minimal
43	San Antonio TX	3.8	Minimal
44	Memphis TN-MS-AR	2.8	Minimal
45	Houston-Sugar Land-Baytown TX	2.7	Minimal
46	Fort Worth-Arlington TX	2.5	Minimal
47	Dallas-Plano-Irving TX	2.5	Minimal
48	Columbus OH	2.4	Minimal
49	Cleveland-Elyria-Mentor OH	2.3	Minimal
50	Pittsburgh PA	1.7	Minimal

It is very important to note that, because of real estate price decline over last two years (= therefore improved affordability), Risk Index was going down until Q3 2008. Below is the MSA where Risk Index has gone up dramatically. This is primarily because bad economy and increased unemployment. In these MSA, real estate market recovery was delayed due to sluggish economy and increased unemployment.

Rank	Metropolitan Stastical Area	Increase	Index Q4 2008	Risk
1	Portland-Vancouver-Beaverton OR-WA	44.2	66.4	Elevated
2	Atlanta-Sandy Springs-Marietta GA	34.8	55.8	Elevated
3	Baltimore-Towson MD	30.5	83.8	High
4	Washington-Arlington-Alexandria DC-VA-MD-WV	25.9	88.2	High
5	Virginia Beach-Norfolk-Newport News VA-NC	22.6	77.6	High
6	Minneapolis-St. Paul-Bloomington MN-WI	21.4	58.5	Elevated
7	San Jose-Sunnyvale-Santa Clara CA	20.5	51.4	Elevated
8	Seattle-Bellevue-Everett WA	19.8	30.3	Moderate
9	Milwaukee-Waukesha-West Allis WI	19.2	27.5	Low
10	Newark-Union NJ-PA	19.2	84.1	High
11	Edison-New Brunswick NJ	17.2	89.4	High
12	New York-White Plains-Wayne NY-NJ	17.1	67.6	Elevated
13	Detroit-Livonia-Dearborn MI	16.2	86.3	High
14	Philadelphia PA	14.2	27.5	Low
15	Boston-Quincy MA	13.8	56.6	Elevated

Since they are multiple data source on this type of forecast, it is best to cross-reference them and make your decisions!

When will the Real Estate Market Hit The Bottom (by Money Magazine)

When does US Real Estate Hit the Bottom? - 2009 Real Estate Forecast

Ranking of Metro where Real Estate Price is Stable. - 2009 Real Estate Forecast

2009 Real Estate Market Outlook by Fortune Magazine

Happy Investing!!!!