Neil Blumberg, real estate broker, 502-439-2826 www.GoldenRuleMetro.com
Great news for the Louisville housing market was published on February 24, 2005 by PMI Mortgage Insurance Co. (See http://www.pmigroup.com/lenders/eret.html for entire Report)
Firstly, on average, the probability of housing declining in price throughout the US in the next two years, decreased by 2.5%, from 18.6% to only 16.1%.
But secondly, and most importantly for Louisville home-owners and investors, the probability of housing declining in value in the Louisville market over the next two years is only 6.3%. Put differently, the chance of housing prices remaining the same or increasing in Louisville over the next two years is 93.7%!
An analysis of this Report was published at http://biz.yahoo.com/bw/050224/245246_1.html, a partial copy of which is pasted below.
12504 Nassau Lane, Louisville, Kentucky, 40243
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WALNUT CREEK, Calif.--(BUSINESS WIRE)--Feb. 24, 2005--PMI Mortgage Insurance Co., a subsidiary of The PMI Group, Inc. (NYSE:PMI - News), has released its winter 2005 Risk Index indicating a decrease in the probability of an overall house price decline since the autumn of 2004. PMI's Risk Index represents PMI's view on geographic house-price risk and the probability of a regional home-price decline as measured over the next two years.
Based on PMI's Risk Index model, as of January 2005, the average risk value of the 50 largest Metropolitan Statistical Areas (MSAs) is 161. This implies that on average, there exists a 16.1 percent probability of an overall house price decline, as measured within the next two years and across the 50 largest housing markets.
Coastal MSAs continued to crowd the top of PMI's Risk Index. Three MSAs in the Northeast region and six California MSAs held the top nine spots on the risk index where home price declines are most likely over the next two years. Boston, San Jose-Santa Clara, San Francisco-Oakland, San Diego and Providence rounded out the five most risky on the risk index list. New England MSAs have maintained a trend of lower affordability and heightened house-price risk. On the west coast, labor conditions in Northern California MSAs have improved considerably compared to the previous quarter, but substantial growth in home prices has lowered affordability, pushing up their risk index values.
PMI Risk Index by MSA
Risk
MSA Index
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Boston-Cambridge-Quincy, MA-NH 533
San Jose-Sunnyvale-Santa Clara, CA 530
San Francisco-Oakland-Fremont, CA 479
San Diego-Carlsbad-San Marcos, CA 433
Providence-New Bedford-Fall River, RI-MA 397
Sacramento-Arden-Arcade-Roseville, CA 369
New York-Northern New Jersey-Long Island, NY-NJ-PA 363
Los Angeles-Long Beach-Santa Ana, CA 359
Riverside-San Bernardino-Ontario, CA 316
Detroit-Warren-Livonia, MI 274
Minneapolis-St Paul-Bloomington, MN-WI 263
Denver-Aurora, CO 224
Miami-Fort Lauderdale-Miami Beach, FL 176
Average 161
Jacksonville, FL 158
Washington-Arlington-Alexandria, DC-MD-VA-WV 151
Hartford-West Hartford-East Hartford, CT 142
Tampa-St Petersburg-Clearwater, FL 137
Austin-Round Rock, TX 117
Richmond, VA 117
Charlotte-Gastonia-Rock Hill, NC-SC 113
Dallas-Fort Worth-Arlington, TX 112
Portland-Vancouver-Beaverton, OR-WA 109
Phoenix-Mesa-Scottsdale, AZ 105
Kansas City, MO-KS 105
Houston-Baytown-Sugarland, TX 103
Orlando, FL 102
Atlanta-Sandy Springs-Marietta, GA 101
Virginia Beach-Norfolk-Newport News, VA-NC 101
Las Vegas-Paradise, NV 97
Seattle-Tacoma-Bellevue, WA 97
Baltimore-Towson, MD 96
St Louis, MO-IL 94
Chicago-Naperville-Joliet, IL 90
Cleveland-Elyria-Mentor, OH 74
Milwaukee-Waukesha-West Allis, WI 73
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 71
New Orleans-Metairie-Kenner, LA 70
San Antonio, TX 69
Columbus, OH 68
Nashville-Davidson-Murfreesboro, TN 65
Louisville, KY-IN 63
Cincinnati-Middletown, OH-KY-IN 63
Birmingham-Hoover, AL 62
Salt Lake City, UT 61
Memphis, TN-MS-AR 60
Indianapolis, IN 60
Rochester, NY 59
Oklahoma City, OK 57
Buffalo-Niagara Falls, NY 57
Pittsburgh, PA 57
The PMI Risk Index
The PMI Risk Index is a statistical model based on certain measures of economic activity and conditions that PMI believes are predictive of the likelihood of home price declines over the next two years. Factors used to derive the PMI Risk Index include the House Price Index from the Office of Federal Housing Enterprise Oversight, labor market statistics from the Bureau of Labor Statistics and the affordability index, which captures changes in the demand for housing as a function of local median household income and the median mortgage payment.
The PMI Risk Index scale ranges from one to 1,000, where a higher score indicates a higher likelihood of future home price declines. For example, a PMI Risk Index of 100 indicates a 10% chance of a decline in home prices over the next two years.
Because the PMI Risk Index scale is linear, if the PMI Risk Index for an MSA were to increase by 100%, say to 200 from 100, then, according to the PMI Risk Index model, the risk of home price decline has also doubled. Alternatively, if the score were to decline by 50%, for example to 50 from 100, the risk of home price decline has also declined by 50%.
Cautionary Statement: Statements in this press release that are not historical facts or that relate to future plans, events or performance are 'forward-looking' statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, PMI's Risk Index and any related discussion, and statements relating to future economic and housing market conditions. Forward-looking statements are subject to a number of risks and uncertainties including but not limited to, the following factors: changes in economic conditions, economic recession or slowdowns, adverse changes in consumer confidence, declining housing values, higher unemployment, deteriorating borrower credit, changes in interest rates, or a combination of these factors. Other risk and uncertainties are discussed in the Company's filings with the Securities and Exchange Commission, including our report on Form 10-Q for the period ended June 30, 2004.
Contact:
PMI Mortgage Insurance Co.
Josh Wozman, 925-658-6863 (Media)
Matt Nichols, 925-658-6618 (Investor)
