Home Prices: We haven’t hit bottom yet
PMI Mortgage Insurance recently released their analysis of housing trends and ranked the nation’s 50 largest metropolitan statistical areas (MSAs) according to the likelihood that home prices will be lower in two years. Scary stuff – twelve of the nation’s Top 50 MSAs are estimated to have 60% or greater chance that home prices will continue to decline. To download a full copy of the report and attachments (which includes data on the 379 most populous MSAs), go to www.pmi-us.com/products_services/eret.html
This is probably not big news to lenders operating in these markets, but it does reinforce the idea that we haven’t hit bottom yet and home prices won’t improve in most of the country for the next few years.
This is obviously a time for caution and financial institutions with large mortgage or home equity portfolios have become very conservative. Many have overcorrected as they focus on working out problems in their portfolios.
That means it is also a time for opportunity. Not every MSA, and not every neighborhood, is equally effected. This is a good time for banks that have been conservative to make judicious investments in capturing share by attracting high quality home equity loans while their competition is focused cleaning up problems.