Daily Real Estate News July 1, 2008
Celebrities Have Money Troubles, Too
The problems faced by entertainer Ed McMahon have been widely publicized, but other well-known people are in similar straits.
Boxer Evander Holyfield lost his $10 million estate in Atlanta in May to foreclosure. Baseball great Jose Canseco’s $2.5 million home in suburban Los Angeles is also in foreclosure, as is the home of former Tennessee Titan football player Adam “Pacman” Jones. Ex-NBA star Latrell Sprewell is in danger of losing his $405,000 Milwaukee home and his yacht has been repossessed.
Actor Dustin Diamond, who played Screech on "Saved by the Bell," saved his home by selling T-shirts on his Web site and asking fans for money on the Howard Stern Show.
Singer Michael Jackson cut a deal with casino owner Tom Barrack to get out from under loans on Neverland Ranch by appearing in Barrack’s establishments.
Source: Business Week, Chris Palmeri (06/27/08)
Got me....
Friday, July 4, 2008
Summer 2008 Risk Index
PMI Summer 2008 Risk Index Indicates Risk Intensifying in Areas With Previous Rapid Home Price Growth
Housing Affordability Continues to Improve
WALNUT CREEK, Calif., July 1 /PRNewswire-FirstCall/ -- PMI Mortgage Insurance Co., the primary U.S. subsidiary of The PMI Group, Inc. (NYSE: PMI), today released its Summer 2008 U.S. Market Risk Index(SM), which ranks the nation's 50 largest metropolitan statistical areas (MSAs) according to the likelihood that home prices will be lower in two years. The U.S. Market Risk Index shows risk further diverged along two distinctly different paths during the first quarter of 2008, continuing a trend that began in the fourth quarter of 2007. In general, risk continued to intensify in many of the MSAs where home price growth had significantly exceeded historical norms during the housing boom, but continued to decline in many other areas across the country.
A complete copy of the Summer 2008 PMI ERET report and an appendix that provides data for all 381 U.S. MSAs is available at: http://www.pmi-us.com/eret.
The highest risk of future price declines remains in Riverside-San Bernardino-Ontario, CA (95.5), followed by Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (92.2), and West Palm Beach-Boca Raton-Boynton Beach, FL (91.9). The areas with the lowest risk of price declines are in Fort Worth-Arlington, TX, Dallas-Plano-Irving, TX, and Pittsburgh, PA, each at less than a 1 percent chance.
The risk of lower prices in two years declined in 35 of the nation's 50 largest MSAs, and among all 381 MSAs, 326 experienced a decline in risk. Among the top 50 MSAs, 16 ranked in the two highest risk categories, and among those, 15 were in California, Florida, Nevada, and Arizona. Risk of lower prices in two years is greater than 50 percent in all of these MSAs.
Risk scores translate directly into an estimated percentage risk that home prices will be lower in two years. The Summer 2008 Risk Index is based on first-quarter Office of Federal Housing Enterprise Oversight (OFHEO) data.
Compared with a year earlier, there has been a significant increase in the number of existing single-family homes for sale relative to the number of buyers, even beyond the normal increase in the spring home sales season. April's ratio is the highest since 1985, said David Berson, PMI's Chief Economist and Strategist. Given the magnitude of the inventory overhang, we expect national home price declines to continue into at least 2009.
Housing affordability continued to improve during the first quarter, according to PMI's proprietary Affordability Index(SM), which measures how affordable homes are today in a given MSA relative to a baseline of 1995. An Affordability Index score exceeding 100 indicates that homes have become more affordable while a score below 100 means they are less affordable. Across the nation, 69.3 percent of the nation's 381 MSAs showed increased affordability; while 30.7 percent of all MSAs experienced declines in affordability. Affordability remains challenged in the 17 MSAs with risk scores in the two highest risk ranks. Home prices in these areas will need to fall further in order to move back in line with incomes before there will be meaningful reductions in risk scores.
In addition to the PMI U.S. Market Risk Index showing the risk of price declines, PMI's Summer 2008 Economic and Real Estate Trends(SM) (ERET) also examines the accelerated decline of national home prices in the first quarter of 2008.
PMI Summer 2008 PMI U.S. Market Risk Index
Rank MSA Score
1 Riverside-San Bernardino-Ontario; CA 95.5
1 Fort Lauderdale-Pompano Beach-Deerfield Beach; FL 92.2
1 West Palm Beach-Boca Raton-Boynton Beach; FL 91.9
1 Orlando-Kissimmee; FL 91.1
1 Las Vegas-Paradise; NV 88.1
1 Tampa-St. Petersburg-Clearwater; FL 86.6
1 Santa Ana-Anaheim-Irvine; CA 85.8
1 Los Angeles-Long Beach-Glendale; CA 85.7
1 Miami-Miami Beach-Kendall; FL 84.8
1 Sacramento-Arden-Arcade-Roseville; CA 82.2
1 Phoenix-Mesa-Scottsdale; AZ 79.6
1 San Diego-Carlsbad-San Marcos; CA 78.0
1 Jacksonville; FL 73.2
1 Oakland-Fremont-Hayward; CA 72.8
2 San Jose-Sunnyvale-Santa Clara; CA 51.3
2 Providence-New Bedford-Fall River; RI-MA 43.4
3 San Francisco-San Mateo-Redwood City; CA 35.7
3 Washington-Arlington-Alexandria; DC-VA-MD-WV 21.4
3 Nassau-Suffolk; NY 21.2
4 Edison-New Brunswick; NJ 16.2
4 Virginia Beach-Norfolk-Newport News; VA-NC 13.8
4 Boston-Quincy; MA 11.8
4 Detroit-Livonia-Dearborn; MI 11.1
5 Portland-Vancouver-Beaverton; OR-WA 8.7
5 Minneapolis-St. Paul-Bloomington; MN-WI 8.2
5 Newark-Union; NJ-PA 6.5
5 New York-White Plains-Wayne; NY-NJ 6.0
5 Baltimore-Towson; MD 5.5
5 Warren-Troy-Farmington Hills; MI 5.3
5 Cambridge-Newton-Framingham; MA 4.3
5 Atlanta-Sandy Springs-Marietta; GA 2.0
5 Seattle-Bellevue-Everett; WA 1.7
5 Chicago-Naperville-Joliet; IL 1.5
5 Philadelphia; PA 1.4
5 Nashville-Davidson--Murfreesboro--Franklin; TN 1.3
5 St. Louis; MO-IL 1.0
5 Milwaukee-Waukesha-West Allis; WI <1 href="http://www.pmi-us.com/">http://www.pmi-us.com.
Cautionary Statement: Statements in this press release that are not historical facts or that relate to future plans, events or performance are 'forward-looking' statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, PMI's U.S. Market Risk Index, Affordability Index, and any related discussion, and statements relating to future economic and housing market conditions. Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, the following factors: changes in economic conditions, economic recession or slowdowns, adverse changes in consumer confidence, declining housing values, higher unemployment, deteriorating borrower credit, changes in interest rates, or a combination of these factors. Readers are cautioned that any statements with respect to future economic and housing market conditions are based upon current economic conditions and, therefore, are inherently uncertain and highly subject to the changes in the factors enumerated above. Other risk and uncertainties are discussed in the Company's filings with the Securities and Exchange Commission, including our report on Form 10-K for the year ended December 31, 2007 and our Form 10-Q for the quarter ended March 31, 2008.
SOURCE PMI Mortgage Insurance Co.
Housing Affordability Continues to Improve
WALNUT CREEK, Calif., July 1 /PRNewswire-FirstCall/ -- PMI Mortgage Insurance Co., the primary U.S. subsidiary of The PMI Group, Inc. (NYSE: PMI), today released its Summer 2008 U.S. Market Risk Index(SM), which ranks the nation's 50 largest metropolitan statistical areas (MSAs) according to the likelihood that home prices will be lower in two years. The U.S. Market Risk Index shows risk further diverged along two distinctly different paths during the first quarter of 2008, continuing a trend that began in the fourth quarter of 2007. In general, risk continued to intensify in many of the MSAs where home price growth had significantly exceeded historical norms during the housing boom, but continued to decline in many other areas across the country.
A complete copy of the Summer 2008 PMI ERET report and an appendix that provides data for all 381 U.S. MSAs is available at: http://www.pmi-us.com/eret.
The highest risk of future price declines remains in Riverside-San Bernardino-Ontario, CA (95.5), followed by Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (92.2), and West Palm Beach-Boca Raton-Boynton Beach, FL (91.9). The areas with the lowest risk of price declines are in Fort Worth-Arlington, TX, Dallas-Plano-Irving, TX, and Pittsburgh, PA, each at less than a 1 percent chance.
The risk of lower prices in two years declined in 35 of the nation's 50 largest MSAs, and among all 381 MSAs, 326 experienced a decline in risk. Among the top 50 MSAs, 16 ranked in the two highest risk categories, and among those, 15 were in California, Florida, Nevada, and Arizona. Risk of lower prices in two years is greater than 50 percent in all of these MSAs.
Risk scores translate directly into an estimated percentage risk that home prices will be lower in two years. The Summer 2008 Risk Index is based on first-quarter Office of Federal Housing Enterprise Oversight (OFHEO) data.
Compared with a year earlier, there has been a significant increase in the number of existing single-family homes for sale relative to the number of buyers, even beyond the normal increase in the spring home sales season. April's ratio is the highest since 1985, said David Berson, PMI's Chief Economist and Strategist. Given the magnitude of the inventory overhang, we expect national home price declines to continue into at least 2009.
Housing affordability continued to improve during the first quarter, according to PMI's proprietary Affordability Index(SM), which measures how affordable homes are today in a given MSA relative to a baseline of 1995. An Affordability Index score exceeding 100 indicates that homes have become more affordable while a score below 100 means they are less affordable. Across the nation, 69.3 percent of the nation's 381 MSAs showed increased affordability; while 30.7 percent of all MSAs experienced declines in affordability. Affordability remains challenged in the 17 MSAs with risk scores in the two highest risk ranks. Home prices in these areas will need to fall further in order to move back in line with incomes before there will be meaningful reductions in risk scores.
In addition to the PMI U.S. Market Risk Index showing the risk of price declines, PMI's Summer 2008 Economic and Real Estate Trends(SM) (ERET) also examines the accelerated decline of national home prices in the first quarter of 2008.
PMI Summer 2008 PMI U.S. Market Risk Index
Rank MSA Score
1 Riverside-San Bernardino-Ontario; CA 95.5
1 Fort Lauderdale-Pompano Beach-Deerfield Beach; FL 92.2
1 West Palm Beach-Boca Raton-Boynton Beach; FL 91.9
1 Orlando-Kissimmee; FL 91.1
1 Las Vegas-Paradise; NV 88.1
1 Tampa-St. Petersburg-Clearwater; FL 86.6
1 Santa Ana-Anaheim-Irvine; CA 85.8
1 Los Angeles-Long Beach-Glendale; CA 85.7
1 Miami-Miami Beach-Kendall; FL 84.8
1 Sacramento-Arden-Arcade-Roseville; CA 82.2
1 Phoenix-Mesa-Scottsdale; AZ 79.6
1 San Diego-Carlsbad-San Marcos; CA 78.0
1 Jacksonville; FL 73.2
1 Oakland-Fremont-Hayward; CA 72.8
2 San Jose-Sunnyvale-Santa Clara; CA 51.3
2 Providence-New Bedford-Fall River; RI-MA 43.4
3 San Francisco-San Mateo-Redwood City; CA 35.7
3 Washington-Arlington-Alexandria; DC-VA-MD-WV 21.4
3 Nassau-Suffolk; NY 21.2
4 Edison-New Brunswick; NJ 16.2
4 Virginia Beach-Norfolk-Newport News; VA-NC 13.8
4 Boston-Quincy; MA 11.8
4 Detroit-Livonia-Dearborn; MI 11.1
5 Portland-Vancouver-Beaverton; OR-WA 8.7
5 Minneapolis-St. Paul-Bloomington; MN-WI 8.2
5 Newark-Union; NJ-PA 6.5
5 New York-White Plains-Wayne; NY-NJ 6.0
5 Baltimore-Towson; MD 5.5
5 Warren-Troy-Farmington Hills; MI 5.3
5 Cambridge-Newton-Framingham; MA 4.3
5 Atlanta-Sandy Springs-Marietta; GA 2.0
5 Seattle-Bellevue-Everett; WA 1.7
5 Chicago-Naperville-Joliet; IL 1.5
5 Philadelphia; PA 1.4
5 Nashville-Davidson--Murfreesboro--Franklin; TN 1.3
5 St. Louis; MO-IL 1.0
5 Milwaukee-Waukesha-West Allis; WI <1 href="http://www.pmi-us.com/">http://www.pmi-us.com.
Cautionary Statement: Statements in this press release that are not historical facts or that relate to future plans, events or performance are 'forward-looking' statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, PMI's U.S. Market Risk Index, Affordability Index, and any related discussion, and statements relating to future economic and housing market conditions. Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, the following factors: changes in economic conditions, economic recession or slowdowns, adverse changes in consumer confidence, declining housing values, higher unemployment, deteriorating borrower credit, changes in interest rates, or a combination of these factors. Readers are cautioned that any statements with respect to future economic and housing market conditions are based upon current economic conditions and, therefore, are inherently uncertain and highly subject to the changes in the factors enumerated above. Other risk and uncertainties are discussed in the Company's filings with the Securities and Exchange Commission, including our report on Form 10-K for the year ended December 31, 2007 and our Form 10-Q for the quarter ended March 31, 2008.
SOURCE PMI Mortgage Insurance Co.
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