PMI Q2 risk index finds 85 percent of MSAs facing risk of price declines by 2011.(Briefing Book)

The risk of home-price depreciation is spreading across the country--well beyond the housing boom states where the housing bubble first burst. As many as 324--or 85 percent--of the nation's 381 metropolitan statistical areas face the risk of declining home prices by 2011, according to the second-quarter edition of the U.S. Market Risk Index[SM] released by PMI Mortgage Insurance Co., Walnut Creek, California. From the report's findings, it appears that home prices will be soft for the foreseeable future.

But Florida, California, Nevada and Arizona continue to distinguish themselves as the worst of the worst markets, currently. The PMI Risk Index found that 36 of the most risky MSAs were located in those four states. The 10 riskiest housing markets of the 50 largest MSAs were all located in those four states. PMI also reported that 60 percent of the top 50 MSAs bad greater than 50 percent probability of lower home prices in the first quarter of 2011.

And if you were looking for some good news to go along with the rampant bad news, here it is: 98 percent of the 381 MSAs in the reports showed higher home affordability.

PMI's second-quarter 2009 risk index found some interesting markets on its list of the 10 most-stable of the 50 largest MSAs. Surprisingly, Cleveland's MSA tops the list of 10 most-stable housing markets, followed by Pittsburgh and Columbus, Ohio, The rest of the MSAs on the stable-market list were: San Antonio, Houston, Dallas and Fort Worth, Texas; St. Louis; Charlotte, North Carolina; and Nashville, Tennessee.

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