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Virginia’s housing prices have less chance of declining

The risk of a Virginia home losing value over the next two years is dropping as the economy improves, according to the latest PMI Market Risk Index from economics researcher PMI ECON. The report doesn't discuss how much a home's value could change — only the likelihood that in two years it will be worth more or less than it is today. The Market Risk Index is historically about 80% accurate.

Researchers calculated the risk using factors such as unemployment rates, housing affordability, and past price appreciation. The resulting risk index is the probability that the region's home values will decline. So a risk index of 65 means there's a 65 percent chance of home prices going down over the next two years.

Winchester, for example, has a risk index of 95.1 — according to PMI, prices are almost certain to drop over the next two years. Charlottesville, on the other hand, has a risk index of 49.8 — about an even chance of prices falling or rising.

The good news in all this: While there is still a good chance of prices falling over the next two years, in every Virginia Metropolitan Statistical Area, the risk of lower prices dropped from the third to fourth quarters of 2009. And as the economy improves, home prices will continue to stabilize.

You can get all the details from PMI.  This was taken from the VAR website 5/20/2010