Saturday, April 12, 2008

Risk Of Price Declines

Although the risk of price declines in California markets continued to rise, the rate of increase was "significantly below" the third quarter. For the eight California MSAs in the top 50, the average increase in risk score was 2.1 percent, compared to a 19 percent increase between the third and fourth quarters.

Among the top 50 MSAs, the 14 PMI determined face a greater than 50 percent chance of price declines in the next two years were:
• Riverside-San Bernardino-Ontario, Calif. (93 percent)
• Las Vegas-Paradise, Nev. (92 percent)
• Orlando-Kissimmee, Fla. (85 percent)
• Ft. Lauderdale-Pompano Beach-Deerfield Beach, Fla. (84 percent)
• Phoenix-Mesa-Scottsdale, Ariz. (84 percent)
• Santa Ana-Anaheim-Irvine, Calif. (81 percent)
• West Palm Beach-Boca Raton-Boynton Beach, Fla. (80 percent)
• Sacramento-Arden-Arcade-Roseville, Calif. (78 percent)
• Tampa-St. Petersburg-Clearwater, Fla. (78 percent)
• Los Angeles-Long Beach-Glendale, Calif. (77 percent)
• San Diego-Carlsbad-San Marcos, Calif. (73 percent)
• Oakland-Fremont-Hayward, Calif. (64 percent)
• Miami-Miami Beach-Kendall, Fla. (61 percent)
• San Jose-Sunnyvale-Santa Clara, Calif. (51 percent)


Price declines also present the biggest opportunity for the buyers. Here in the Riverside County any home that either bank owned or a short sale and is listed way below market will get 3-5 offers within the first few days after the listing show up in the MLS. Sometimes, it is sold from $10K to $20K more than the asking price.
It is the buyer's market but it is also back to the bidding game. The highest offer/bidder will win and get the home.

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