The latest cattle call from the media about the St. Paul real estate market is that buyers are waiting for the bottom before they decide to buy. That magic day when the true "bottom" is reached can't be predicted (by me, at least), but PMI Mortgage Insurance Co. released its Summer 2008 U.S. Market Risk Index on July 1. This market risk study ranks the 50 largest metropolitan statistical areas (MSAs) by the probability that the home prices will be lower in two years.
The Minneapolis, St. Paul, Bloomington MSA is ranked in the bottom segment with a probability of only 8.2% that houses will be lower in 2 years. These risk factor figures were based on first quarter Office of Federal Housing Enterprise Oversight (OFHEO) data. The Affordability Index score improved in 69.3 percent of the nation's 381 MSAs as well. Because Minneapolis and St. Paul are in the lower rank in risk, the affordability index has improved in our area as well. Both of these factors are good news for the Minneapolis and St. Paul real estate market.