These days as I am tossing around the options of selling vs renting out (part 1 & part 2), I pay special attention to any news about the general health of the housing market. Particularly, I want to know the prospect of further house price appreciation in the Seattle local area.
The August issue of Kiplinger's Personal Finance has a featured story The 13 Riskiest Housing Markets that is well on point. The article, citing a research done by PMI Group, discussed thirteen markets that have a high probability of wide house price decline over the next two years.
A quick search brought me to the source at PMI Group. The cited report is actually the Spring 2005 Edition of Economic and Real Estate Trends, a quarterly publication. In that report, PMI mentioned the following 15 markets that bear a high (>30%) probability of sharp price decline in the near future:
Boston-Quincy, MA (53%)
Nassau-Suffolk, NY (51%)
Oakland-Fremont-Hayward, CA (49%)
San Jose-Sunnyvale-Santa Clara, CA (48%)
San Diego-Carlsbad-San Marcos, CA (47%)
Cambridge-Newton-Framingham, MA (45%)
Santa Ana-Anaheim-Irvine, CA (43%)
Los Angeles-Long Beach-Glendale, CA (41%)
Sacramento-Arden-Arcade-Roseville, CA (40%)
San Francisco-San Mateo-Redwood City, CA (40%)
Providence-New Bedford-Fall River, RI-MA (39%)
Detroit-Livonia-Dearborn, MI (38%)
Riverside-San Bernardino-Ontario, CA (34%)
New York-Wayne-White Plains, NY-NJ (33%)
Edison, NJ (31%)
I'm glad Seattle area is not at the top of the list. As a matter of fact, Seattle was rated with only 8.4% probability of price correction. The house price is also considered as affordable.
Of course, no one has the perfect crystal ball in predicting the future, but as one of the largest private mortgage isurers in the States, PMI certainly has a huge stake in this game. Can I say it has a better crystal ball than most of us?