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Analysts are Still Betting that Santa Fe and Albuquerque Homes won't Decline

Analysts from the PMI Group, the company that provides private mortgage insurance, have issued its the Spring 2008 Risk Index. According to the findings, analysts are betting that prices in both Santa Fe and Albuquerque have a less than 1% chance of being lower two years from now.

At the same time, PMI says that 13 of the nation's top housing markets have more than a 60 percent likelihood of home price declines.

The cities with the biggest price risks are in California, Florida, Nevada and Arizona, and in most cases are already experiencing sharp home price declines.

"Excess supply is responsible for much of the risk we're seeing in the market," David W. Berson, PMI's chief economist and strategist, said in Thursday's report.

"The excess supply of housing in the United States is 9.2 months for existing homes (the 20-year average has been six) and 9.8 months for new homes (the 20-year average has been 5.5), which will continue to depress prices."

Additionally, the report stated that in the 4th Quarter of 2007 Home Values GREW by 4.07% in Santa Fe. This compares to an increase of 9.32% in Q4 2006, a difference of 4.34. In Albuquerque, home values grew by 4.66% in Q4 2007 compared to an increase of 14.45% in Q4 2006.

So, How risky is the Housing Market? The following information shows the markets with the most and least risk of a home price decline, based on price appreciation, economic growth and affordability according to PMI Group's spring risk index. An index of 100 means there is a 100 percent chance of home prices falling in the next two years. This list is represents the top 50 metro areas in the US. A full list with 381 markets can be found here:

Riverside, Calif 93
Las Vegas 91
Orlando 85
Ft. Lauderdale 84
Phoenix 84
Fort Worth Less than 1
Pittsburgh Less than 1
Dallas Less than 1
Houston Less than 1
Indianapolis Less than 1

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Steve Hardy
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