Phoenix Ranked 2nd Riskiest Among U.S. Home Markets

Phoenix has the second-highest risk of home-price declines among 50 major U.S. markets, according to a revamped quarterly risk ranking by mortgage insurer PMI Group. Under PMI's old formula, Phoenix had been last ranked the twenty third-riskiest market. According to PMI, the 10 riskiest markets (and the probability of price declines in these areas in the next two years) are:

1. Inland Empire, 65.2 percent
2. Phoenix, 64.6 percent
3. Las Vegas, 61.4 percent
4. West Palm Beach, Fla., 60.7 percent
5. L.A., 58.6 percent
6. O.C., 57.7 percent
7. Oakland, 57.2 percent
8. Orlando, Fla., 56.3 percent
9. Sacramento, 56 percent
10. San Diego, 55.5 percent

PMI considers markets with a 60 percent or better chance of price declines as most worrisome. To read the entire PMI report, CLICK HERE.

UCLA Anderson Forecast, still bearish [SF Gate]:
"So far, 2007 has been a bit of a puzzle in the California economy. Falling sales, weak prices, and rising foreclosures have continued to rule the local housing markets, and both national and state measures of construction activity suggest that real estate has been a drag on economic growth for close to a year now. But in spite of all this bad news from real estate, the wider California economy is mostly unfazed: job growth has slowed only slightly and we’ve seen only a minor uptick in unemployment. Was the landing from our high-flying real estate markets so soft that we didn’t notice it touching down or is a better metaphor that real estate job losses are like that elusive Godot: always anticipated but never arriving?"

In May, home sales saw a year-over-year drop of 17.4% in the San Francisco Bay Area, reaching the lowest level in 12 years, according to an article by the San Francisco Chronicle. Meanwhile, the median price increased by 5.9% to $720,000, the newspaper says. The price increase doesn't reflect a rise in home prices, but signals a trend in which more high-end homes are selling than lower-cost ones, the Chronicle says. Local neighborhoods experiencing slower sales include sections of Richmond, Oakland and Santa Rosa, among others, while Belvedere, Tiburon and Cupertino are included in areas seeing increased buyer interest, the paper says.