Home Prices Unlikely To Decline

Home prices called unlikely to decline in Denver A risk-index model shows a less-than-5-percent chance prices will be down by 2010.

By Margaret Jackson - The Denver Post
Article Last Updated: 01/15/2008 10:58:59 PM MST

Denver is among those cities at the lowest risk nationwide for a decline
in home prices in the next two years, according to a report released
Tuesday.

Based on a risk-index model developed by Walnut Creek, Calif.-based
PMI Mortgage Insurance Co., Denver has a chance of less than 5
percent that home prices will decline two years from now. The model
takes into account five factors: foreclosures, number of homes for
sale, unemployment rate, housing affordability and past changes in
home prices. Denver fared well in all categories but foreclosures.
"This puts Denver in a pretty good position nationally in terms of the
risk of home-price declines," said David Berson, chief economist and
strategist for the PMI Group Inc.,which operates PMI Mortgage
Insurance as a subsidiary. "Believe me, you're no Las Vegas, where we
think there's an 89 percent chance that prices will be lower two years
from now."

Since peaking in the second quarter of 2005, nationwide home-price
appreciation has decelerated for eight of the last nine quarters,
according to the Office of Federal Housing Enterprise Oversight.
National home values were only 1.8 percent higher at the end of the
third quarter than their levels a year ago.