A primary driver for real estate investing success is understanding markets, from a past, present and future perspective. New data from the PMI Mortgage Insurance Co. PMI’s second quarter U.S. Market Risk Index (using 4th quarter 2009 data) showed fresh evidence of a recovering national housing market, and the prospect of higher housing prices in many markets within two years. Key findings include:

—  Of the nation’s 384 MSAs (Metropolitan Statistical Areas), 356 had a declining Risk Score, with only one showing a slight increase and the remainder unchanged.

—  The number of MSAs in the riskiest category (90 – 100) fell by 26.4% during the fourth quarter, while those in the least risky (0 – 10) increased by 79%.

—  In addition, the number of MSAs with a Risk Score of less than 50, suggesting better than even odds of higher housing prices in two years, increased 26.5% to 186 from 147 in the prior quarter. The number having a score over 50, indicating better odds of lower prices, fell by 16.5% from 237 to 198.

—  While a significant number of the Top 50 MSAs remained in the riskier categories, with 64% still having a greater than 50% chance of lower prices by the end of 2011, that figure is down from 82% in the previous quarter.

—  In addition, 40% of these MSAs showed a score improvement of 20% or more.

—  Although the Risk Index does not measure the magnitude of future declines, the forecast does provide encouraging signs for moderating probabilities of price declines for the remainder of 2010 and into 2011 among these largest MSAs.

Keeping tabs on these and other types of data can go a long way towards real estate investing success — of course, working with a  professional is your next logical step.

What do you think?

Invest well.


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