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