| The latest report from PMI Mortgage Insurance | | | | TX. We are looking at a time period from |
| company looks at real estate trends. The | | | | 1986-2005. |
| report indicated that if you owned a home | | | | |
| from 1986 thru 2005 in 50 of the largest | | | | In San Francisco the return for any 5 year |
| metropolitan areas, you did very well. During | | | | period ranged from a gain of 50% to a loss of |
| that period of time, if you owned a home for | | | | 10%. The median return was 33%. Families |
| 10 years or more, you profited 100% of the | | | | staying in their homes for 15 years did not |
| time. If you owned a home during this period | | | | incur any losses. Their gains were from 14% |
| for 7 years, the percentage of homeowners | | | | to 25%. |
| that profited were 95%. | | | | |
| | | | Home buyers in Los Angeles saw the greatest |
| The economics now are shifting. In the top 50 | | | | losses during this time period. The median |
| metropolitan areas of the country, 48 of them | | | | return for a 5 year period was positive at |
| face a greater chance of a price decline this | | | | 25%, however, losses ranged up to 41% in some |
| quarter then they did last quarter. | | | | cases. A family that stayed in its home for |
| | | | 15 years in LA saw a return of 10% to 24%. |
| PMI assigns a risk index number to differfent | | | | |
| markets. All 50 of the major metropolitan | | | | In the Dallas market trends were seen that |
| areas, except Chicago, have seen their risk | | | | were not seen in other markets. After 5 years |
| index number go up. A risk score of 500 or | | | | of home ownership, homeowners saw their gains |
| more means the geographic area has a high | | | | max out at 22%. Families who owned homes for |
| risk of price declines in the real estate | | | | 10 years or more did not see losses, but they |
| market. There are now 14 of 50 areas that | | | | did not always see gains either. During this |
| have a risk score of 500 or more, which means | | | | time period gains ranged from 0% to 24%. |
| that metropolitan area has a 50% chance of | | | | |
| price decline during the next two years. The | | | | The stable markets looked at were Atlanta, |
| average score has increased from 261 last | | | | Nashville and Cleveland. Atlanta had a median |
| quarter to 284 this quarter. The metropolitan | | | | gain of 20% for 5 years of home ownership. |
| area that saw its risk increase the greatest | | | | For 15 years the gain narrowed to 11% to |
| was Minneapolis, MN, which saw an increase in | | | | 15%. |
| its risk index of 90 points. | | | | |
| | | | In Nashville a 5 year homeownership ranged in |
| Of the metropolitan areas with the highest | | | | gains from 6% to 25%. FOr 15 years of home |
| risk, seven of top ten are in California. | | | | ownership the gains were from 11% to 15%. |
| | | | |
| The report looks at volitile markets and | | | | Home ownership in Cleveland for 5 years |
| stable markets. First lets look at the | | | | showed an increase from 7% to 23%. For 15 |
| volitile markets. These include San | | | | years of home ownership gains were from 12% |
| Francisco, CA; Los Angeles, CA; and Dallas, | | | | to 15%. |