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windmill
Posts:15
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| 10/02/2008 8:02 AM |
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October 2, 2008
Emmet Pierce
UNION-TRIBUNE STAFF WRITER
Homeowners already coping with an uncertain credit market and falling real estate values got more discouraging news yesterday when PMI Mortgage Insurance Co. said home prices in San Diego County are likely to continue dropping for another two years.
The firm said it considered 17 of the largest 50 metro areas in the United States to be at high risk of price declines, with San Diego County's risk at nearly 96 percent. Projected price drops are largely the result of spikes in foreclosures and rising unemployment.
AdvertisementOf the 50 largest metropolitan statistical areas, 24 have a greater than 10 percent risk that home prices will decline. Among those areas, 16 have a risk of greater than 70 percent.
In California, “there has been a big pickup in foreclosures and the economy definitely qualifies as being in recession,” said David Berson, chief economist at PMI.
PMI, based in Walnut Creek, provides residential mortgage insurance to mortgage lenders, capital market participants and investors nationwide.
Communities in California and Florida topped the list of areas facing price drops nationwide. The metro centers at greatest risk were Fort Lauderdale and Riverside-San Bernardino. They each had a score of 99.5 percent.
Kelly Cunningham, economist for the San Diego Institute for Policy Research, said the PMI report isn't surprising, given the nationwide credit crunch.
“We were hoping the housing market would stabilize in San Diego,” Cunningham said. “This (report) says the situation is more dire. I have to agree that housing prices will drop if people are not going to be able to get loans.”
The PMI report used second-quarter data from the Office of Federal Housing Enterprise Oversight. Berson said that his forecast for 381 metro areas doesn't predict degrees of decline.
For example, Berson said San Diego County's prices might wind up being only slightly lower than they are now over the next two years.
Not every community is feeling the pain of falling home prices. The population-weighted average score for all metropolitan statistical areas in the nation rose from 22.3 to 28.3 between the first and second quarters of 2008. That means the chances of falling home prices are still moderately low for most communities.
In San Diego County, the median home price fell in July to $350,000, down 26 percent from a year earlier to the lowest level in 5½ years, the MDA DataQuick research firm reported.
Default notices, the first step in the foreclosure process, totaled 2,850 in August, down from 3,006 in July but up 32 percent, compared with a year earlier. August's 1,979 foreclosures were down from July's record of 2,004, but up 140 percent from a year earlier.
Berson said future home prices will depend, in part, on whether Congress enacts a rescue bill to help troubled financial institutions.
“If there is no rescue bill, the odds of a more severe economic downturn go up,” Berson said.
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patinsd
Posts:39
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| 10/02/2008 8:31 AM |
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| The sky is falling! It isn't, but these damn housing prices keep falling and falling and falling. The Case-Shiller futures on the CME also suggest a similar trend until at least mid-2009. |
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suiteheart
Posts:4
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| 10/10/2008 7:50 PM |
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| According to my broker, PMI has tripled their usual fee when doing loans. How can do that especially in this economy? It effects the monthly payment by so much! |
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