NEW YORK (CNN/Money) - Some of the nation's frothiest housing markets are at growing risk of price declines, according to the most recent survey from PMI Mortgage Insurance Corporation.
The PMI Risk Index is based on economic activity and other conditions that PMI thinks are predictive of home-price declines over the next two years.
Factors used to derive the index include home prices, employment conditions and the affordability of homes."
The median price for a resale single-family home in Santa Clara County (AKA Silicon Valley for all you outsiders) is now over $700,000. And you know what seven hundred grand gets you? A 3-bedroom, 2-bath ranch-style tract home in a decent (not great) neighborhood! Nothing special at all! How many people who are first-time home buyers can truly afford that? And no, if you can only swing the payments on an interest-only loan, you can't really afford the house you're buying. I know I can't afford to buy anytime soon! BUT...
The San Jose-Santa Clara-Sunnyvale area (where I live) has a 51.3% chance of a price decline. Tick, tock, tick, tock. I'm waiting. With bated breath. Fingers and toes crossed. Waiting...