Risk Returns to Pre Meltdown Levels

According to the latest PMI report, risk levels in the Portland Real Estate Market dropped to levels we haven’t seen since the financial crisis of September 2008.   For the past two years PMI has calculated a risk index for Portland of around 90%.  In the just released report, PMI estimates a risk index of 33%.     This is an encouraging sign of pricing support at our current pricing levels, and is another indicator that it’s OK to be a buyer in our market, especially in the urban core neighborhoods that are the preferred locations of the two largest demographic groups that are buying homes (see report from the Brookings Institute).

The PMI risk index is an estimate that real estate prices will be lower over a two year time horizon.  This is only an estimate of the probability of prices will be lower, not how much lower.  PMI is the mortgage insurance group, and this analysis is used to help PMI price mortgage insurance premiums.  The PMI report lags the market by 2 quarters, so this just released report is based on data from 2Q 2010. 

See the just released 4Q 2010 PMI report. 

See previous reports from PMI: 3Q 2010, 2Q 2010