The PMI Group released their quarterly Economic and Real Estate Trends Report this past week:
Economic and Real Estate Trends – Spring 2006
Included is their Market Risk Index. NJ still ranks up near the top with an approximate 50% chance of market decline.
Edison, NJ MSA – 51.6%
New York-Wayne-White Plains, NY-NJ MSA – 50.6%
Newark-Union, NJ-PA – 42.7%
To get a feel against how other bubble markets ranked in their index, Las Vegas-Paradise, NV came in at 45.7%, so it’s clear we’re amongst the riskiest of markets.
The report also contains an article on homeownership, I won’t copy it all in here, but I’d like to take just one snippet that I found interesting..
I have my own story to tell in this regard. I’m one of the unlucky ones: in 1989, I bought a home in Los Angeles—right before the bottom fell out of the market. When I got a job in another city and sold seven years later, I lost my down payment and everything I’d put in since, and I even wrote a check to the bank for a little bit extra.
…
As the PMI Risk Index shows, some regions of the US face a significant probability of price declines. This is something to consider, particularly if you’re investing for the short term.
Caveat Emptor!
Grim