I have written about title giant PMI Group in previous posts on this blog.Their quarterly metropolitan area "risk list" came out last week. The list covers 381 markets and ranks them according to the probability of real estate price declines during the next year.
The 10 areas most likely to see real estate price declines:
- Fort Lauderdale, FL
- Riverside-San Bernadino, California
- Orlando
- Miami and Miami Beach
- Tampa-St Pete
- Las Vegas
- Los Angeles
- Santa Ana-Anaheim-Irvine; CA
- Jacksonville, Florida
- Sacramento-Arden-Arcade-Roseville; CA
The least risky markets, in terms of avoiding short-term valuation losses, according to PMI: Texas dominates the list with Dallas, Ft. Worth, Houston and San Antonio all in the top five. But Pittsburgh, Charlotte, Cleveland, Denver and Indianapolis also are among the safest bets to grow property values in the next 24 months.
Another way to state the results of this report would be: the best deals ( lowest prices) can be found in cities on the top 10 list. The banks are still clearing out inventory. The least risky markets will have less depreciation and, therefore, there is much less motivation (area more stable) to sell properties as cheaply.
Where was Phoenix-Mesa on the list? #11.
Wow.
What kind of absolutely ridiculous logic is this?
So you're saying the best deals are in the places that you're MOST likely to lose money in the next 24 months????
Posted by: LB | January 26, 2009 at 05:18 PM
That is correct. Where do you think you will find the lowest priced homes? The next step is buying lowing enough to get some insulation against depreciation. Does that make sense?
Posted by: Ron | January 26, 2009 at 05:27 PM
Amazing! Best deals huh?
-Audrey
Posted by: Aurora Colorado houses for sale | March 12, 2009 at 03:19 AM
That is correct. The stable housing markets contain stable housing prices. It is rare to get a super deal on any home in a stable market -- and your likelihood for big gain is reduced. In a "risk" market there are "dirt cheap" homes everywhere. And when dirt cheap homes compete with other dirt cheap homes -- the prices are even better. That is the time to buy in a risky market. The foreclosures will eventually dry up. That is when you make a decent return on your investment. In the meantime,you can use the property as a rental asset and make a positive cash flow from all those people who lost their homes to foreclosure -- and will not be able to buy another one for five years. Investors are starting to flock to the Phoenix area again.
Posted by: Ron | March 12, 2009 at 10:24 AM