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Orange County among 10 riskiest housing markets nationwide
Region has a 99.9 percent chance that home prices will drop by 2011, says PMI.
By Kristen SchottPublished: July 09, 2009 10:02 AM
Orange County is among the top 10 riskiest housing markets nationwide, according to PMI Insurance Co.'s U.S. Market Risk Index.
The index ranks the nation's 50 largest metropolitan statistical areas (MSA) using economic, housing and others factors such as home price appreciation, affordability, housing supply and foreclosures. Risk scores anticipate the probability that the price of homes in a selected region will be lower at the end of the next two years, according to PMI.
That's bad news for the Santa Ana-Anaheim-Irvine MSA, which had a risk index of 99.9 percent. The region will most likely have even lower housing prices in 2011 than it does right now. (The latest release from California Association of Realtors put O.C.'s median home price at $474,110.)
Orange County's market risk index rose from 99 percent in the fourth quarter of last year to 99.9 percent in the first quarter. Price declines rose from 8 percent in the fourth quarter to 21 percent in the first quarter, putting it at a volatility rate of nearly 27 percent. PMI defines price volatility as the standard deviation of quarterly two-year house prices. The higher the ranking, the riskier the MSA's real estate market is. And O.C.'s is among the highest.
The region's affordability index came in at 114, which signals that homes in the area are less expensive than they were, even in the fourth quarter, which saw a ranking of 98. Scores above 100 demonstrate that homes have become more affordable; under 100 means they are less affordable, according to PMI. But this is good news for buyers, who continue to take advantage of lower home prices in the region.
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The index ranks the nation's 50 largest metropolitan statistical areas (MSA) using economic, housing and others factors such as home price appreciation, affordability, housing supply and foreclosures. Risk scores anticipate the probability that the price of homes in a selected region will be lower at the end of the next two years, according to PMI. That's bad news for the Santa Ana-Anaheim-Irvine MSA, which had a risk index of 99.9 percent. The region will most likely have even lower housing prices in 2011 than it does right now. (The latest release from California Association of Realtors put O.C.'s median home price at $474,110.) Orange County's market risk index rose from 99 percent in the fourth quarter of last year to 99.9 percent in the first quarter. Price declines rose from 8 percent in the fourth quarter to 21 percent in the first quarter, putting it at a volatility rate of nearly 27 percent. PMI defines price volatility as the standard deviation of quarterly two-year house prices. The higher the ranking, the riskier the MSA's real estate market is. And O.C.'s is among the highest. The region's affordability index came in at 114, which signals that homes in the area are less expensive than they were, even in the fourth quarter, which saw a ranking of 98. Scores above 100 demonstrate that homes have become more affordable; under 100 means they are less affordable, according to PMI. But this is good news for buyers, who continue to take advantage of lower home prices in the region. NEXT PAGE >> Related headlines O.C. office, industrial markets see shrinking gap in asking, bidding prices 'OC METRO Minute,' July 8: Nearly 44,000 foreclosure filings in O.C. from June '08-May '09 Sales of Orange County businesses fall 49 percent |
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