From a recent news feed come this story - PMI Mortgage Insurance Co., one of the largest providers of mortgage insurance in the country, ranks the nation’s 50 largest metropolitan statistical areas according to the likelihood that home prices will be lower in two years. The Fall 2008 Risk Index is based on second-quarter Office of Federal Housing Enterprise Oversight (OFHEO) data.
Risk scores of less than 10 percent aren’t statistically significant, according to David Berson, PMI's Chief Economist and Strategist. But in some areas where prices rose the most during the housing boom, the risk of price declines remains high.
The highest risk of future price declines are in Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (99.5 percent), Riverside-San Bernardino-Ontario, Calif. (99.5 percent), Orlando-Kissimmee, Fla. (99.4 percent), Miami-Miami Beach-Kendall, Fla. (99.3 percent), and Tampa-St. Petersburg-Clearwater, Fla. (99 percent).
The 15 areas where the risk of price declines is less than 1 percent are:
St. Louis, Mo.-Ill.
Milwaukee-Waukesha-West Allis, Wis.
Charlotte-Gastonia-Concord, N.C.-S.C.
Cincinnati-Middletown, Ohio-Ky.-Ind.
Denver-Aurora, Colo.
Columbus, Ohio
Austin-Round Rock, Texas
Kansas City, Mo-Kan.
Indianapolis-Carmel, Ind.
Memphis, Tenn.-Miss.-Ark.
San Antonio, Texas
Pittsburgh, Pa.
Houston-Sugar Land-Baytown, Texas
Dallas-Plano-Irving, Texas
Fort Worth-Arlington, Texas
You’ll notice that our area is not on either list and that’s probably as good as we could have hoped for. To read the complete report, click here; or, to just see the index that ranks the major metropolitan areas, click here. The Detroit metro area and the Ann Arbor area both ranked LOW in risk for further price declines in this report. That’s probably because we’ve been leading the fall in values and have bottomed out already. We are hopefully poised to head back up, soon. Maybe we can at least catch our breaths, try to sell off some of the inventory overhang this winter, and be ready for a full recovery next spring. Let's all hope!
Showing posts with label home prices. Show all posts
Showing posts with label home prices. Show all posts
Sunday, October 5, 2008
Wednesday, September 26, 2007
How do we compare?
There is a new way to invest in real estate that depends upon an interesting new real estate index for its pricing. The so-called RPX Index is offered by brokers (see http://www.radarlogic.com/ for details on it and the company that markets the index). The company - Radar Logic, Inc. - tracks the cost per square foot for home sales in 25 major metropolitan areas and then, using secret formulas, it produces a composite index, which it calls the MSA Composite (the MSA standing for Metropolitan Statistical Area).
Brokers across the U.S. are currently being solicited to sell shares in this index, which will float up and down with the composite of the real estate markets in those areas. It’s sort of like the Index Funds on Wall Street, except it doesn’t appear that this index is tied in any way to actually investing in the underlying real estate – it’s just a number that floats up and down and upon which you can bet by investing in this pool. There are many strange “investments” that hedge funds and others in the exotic world of high finance have created and this is just one of them. You’ve got to love the creativity of these people.
Anyway, I found it fascinating and decided to relay to you some of the information from a recent posting on their site concerning real estate pricing in some of the areas that they track. The data is for sold properties from July public records data that they collect, so it is a bit old, but the relative cost comparisons of the MSA’s that they track is still valid. I sort of had a gut feel for some of the differences that are shown I the data, but I had no idea that some of the gaps between areas were so wide. Below are some examples (note that I have rounded these off to shorten the entries) – All numbers are $/Sq Ft
DETROIT - $107……..Atlanta - $104……….Boston - $245
Chicago - $189…………Charlotte - $101…….Cleveland - $96
Columbus, OH - $101….Denver - $152 ……Jacksonville - $126
Los Angeles - $393…….Las Vegas - $173..…Miami - $195
Minneapolis - $159…….Milwaukee - $123…New York - $305
Philadelphia - $158..…..Phoenix - $159……Sacramento - $212
Seattle - $235…….San Francisco - $450.....San Diego - $312
San Jose - $468…….….St. Louis - $96……...Tampa - $137
Washington, DC - $236
Admittedly these numbers may not include all of the outlying suburbs, since they didn’t really define how wide of an area they include in an MSA. Our local numbers for the same period are as follows:
MILFORD - $137….Highland - $126….Commerce - $136
White Lake - $113..W. Bloomfield - $129..Brighton - $124
Waterford - $108….Lyon/S. Lyon - $136...Wixom - $120
So, Milford fits in above the Ohio crowd (but, then we all knew that, didn't we) and about even with Jacksonville and Tampa, Florida (don’t you wish we had their winter-time weather). Statistics like these are fun to look at, but, they’re basically meaningless. If you want a daily fix on these numbers, go to the Radar Logic site every day. If you want to keep track of what's hapening in the local, Milford-area market, go to my Web site - http://www.themilfordteam.com/ - and click on the Real Estate Statistics choice in the left hand menu bar.
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