According to the latest PMI Market Risk Index, the San Francisco-San Mateo-Redwood City MSAD ended the first quarter of 2009 with a 66.2% likelihood of house price declines over the next two years, up from 31.6% in the fourth quarter of 2008, up from 30.2% in the fourth quarter of 2007, and up from 39.5% at the beginning of 2005.
The likelihood of decline for a few other nearby areas: Sacramento-Arden-Arcade-Roseville (99.9%), Oakland-Fremont-Hayward (96.4%), San Jose-Sunnyvale-Santa Clara (78.4%).
Keep in mind that the PMI Market Risk Index is tied to the OFHEO house price index which “excludes jumbo loans and the large portion of subprime and Alt-A loans that Fannie Mae and Freddie Mac don’t participate in.”
· Economic and Real Estate Trends: 2nd Quarter 2009 [PMI Group]
∙ PMI’s Market Risk Index And Real Estate Trends Report: Spring 2008 [SocketSite]
∙ Economic And Real Estate Trends: Spring 2005 [SocketSite]