According to the latest PMI Market Risk Index, The San Francisco-San Mateo-Redwood City MSAD ended the fourth quarter of 2007 with a 30.2% likelihood of house price declines over the next two years. And while that’s up from 24.6% in the third quarter of 2007, that’s also down from 39.5% at the beginning of 2005.
The likelihood of decline for a few other nearby areas: Sacramento-Arden-Arcade-Roseville (77.7%), Oakland-Fremont-Hayward (63.8%), San Jose-Sunnyvale-Santa Clara (51.1%).
And for perspective, the Miami-Miami Beach-Kendall MSAD weighs in with a 61% likelihood of decline (roughly twice that of San Francisco, but less than Oakland), while the New York-White Plains-Wayne MSAD weighs in at 7%.
UPDATE: As a number of plugged-in readers have noted, 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: Spring 2008 (pdf) [PMI]
· Economic And Real Estate Trends: Spring 2005 [SocketSite]