Little chance of housing price decline here, survey concludes

According to a recent NashvillePost article, on a nationwide list of areas most likely to face a decline in housing prices, Nashville scored well. According to a market report issued July 27, 2005 by PMI Mortgage Insurance Co., the greater Nashville area ranked 46th on the list of America's 50 largest housing markets.  The greater Nashville area carries a risk index rating of 6.4% indicating the percentage chance of a price decline. Nationwide, there is a 21.3% probability of an overall house price decline within the next two years, across the 50 largest housing markets. This is a small increase from last quarter (20.2 percent), according to PMI.
 

Pittsburgh, Pa. ranked lowest in the survey, with a 5.6% risk. Ranked most likely to be affected by housing price declines is Boston-Quincy, Mass., with a risk index of 55.3%. Nashville tied with Seattle, WA, and is above Cincinnati, OH, with a 6.0% chance of housing price declines.  Overall, such risk has increased in 36 of the nation's 50 largest housing markets, according to the report. Boston, Long Island and four California markets-San Diego, San Jose, Santa Ana, and Oakland-crossed the 50% risk threshold. 

PMI bases its figures on a proprietary statistical model that measures geographic house-price risk by predicting the probability of a regional decline in home prices in the nation's 50 largest metropolitan statistical areas (MSAs) and metropolitan statistical area divisions (MSADs) over the next two years. The PMI US Market Risk Index is based on the House Price Index from the Office of Federal Housing Enterprise Oversight (OFHEO), labor market statistics from the Bureau of Labor Statistics and the PMI affordability index, which uses local median household income, home price appreciation and the price of a conventional mortgage to calculate the local share of mortgage payment to income relative to its baseline year of 1995.In a separate report, the Commerce Department has said today that new home sales in the U.S. rose 4% in June to a seasonally adjusted annual rate of 1.374 million units. Pre-owned home prices jumped 14.5% last month.

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