The report by Walnut Creek-based PMI Mortgage Insurance Company says Sacramento has the 9th riskiest housing market. Spokesman Mark Milner says that’s because appreciation has outpaced local income growth. “When a house is more expensive than people can afford it’s not going to move and ultimately that’ll impact the price of the home.”
He says their study is based on a statistical model that predicts the probability of falling prices. “There’s a 40% chance of a house price decline in Sacramento in the next two years. You’ve got to remember, the converse of this, there’s a 60% chance that there won’t be a decline.”
Other Northern California cities making the top 10 are San Francisco and Oakland. Number one on the list is Boston.