U.S. home prices may be showing signs of a not-so distant bottom in many regions of the country, according to the PMI Summer 2008 Risk Index released today.
The report, which gauges the likelihood of future home price declines, found that 35 of the nation’s 50 largest metropolitan-statistical areas displayed less risk of future price depreciation compared to the prior quarter.
Additionally, 326 of 381 MSAs nationwide experienced a decrease in such risk during the first quarter of 2008, revealing that home prices may actually start rebounding in or before 2010 in much of the country.
Of course all that said, PMI’s Chief Economist David Berson expects home prices nationwide to continue falling into at least 2009, thanks to an inventory glut and a disproportionate number of interested buyers versus sellers.
And risk is actually intensifying in areas where home prices appreciated rapidly beyond historical norms, namely in hard-hit areas like California, Florida, Nevada, and Arizona, where option arms were the norm and now foreclosures fester.
Among the top 50 MSAs, 15 of the 16 ranked in the top two risk categories can be found in the aforementioned states, indicating a substantial amount of time before any meaningful recovery in those hot spots.
The Riverside-San Bernardino-Ontario; CA region (95.5%) is most likely to experience lower home prices in two years, followed by the Fort Lauderdale-Pompano Beach-Deerfield Beach; FL (92.2%) and West Palm Beach-Boca Raton-Boynton Beach; FL (91.9%) regions.
And there’s an 85.7 percent chance that home prices will be lower in the Los Angeles-Long Beach-Glendale; CA region in two years.
Conversely, regions like Forth Worth-Arlington; TX, Pittsburgh; PA, and Denver-Aurora; CO have the lowest risk of home prices being lower two years from now, at less than one percent.