Providence #5 most likely to decline in price

[TheAnk]

Yikes.. This is scary stuff... Providence is #5 on the risk list.. I would have never put it in this category.. Little nervous..

Excerpt from biz.yahoo.com and PMI Mortgage Insurance Co:

PMI Risk Index by MSA

Risk

MSA Index

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Boston-Cambridge-Quincy, MA-NH 533

San Jose-Sunnyvale-Santa Clara, CA 530

San Francisco-Oakland-Fremont, CA 479

San Diego-Carlsbad-San Marcos, CA 433

Providence-New Bedford-Fall River, RI-MA 397

Sacramento-Arden-Arcade-Roseville, CA 369

New York-Northern New Jersey-Long Island, NY-NJ-PA 363

Los Angeles-Long Beach-Santa Ana, CA 359

Riverside-San Bernardino-Ontario, CA 316

Detroit-Warren-Livonia, MI 274

Minneapolis-St Paul-Bloomington, MN-WI 263

Denver-Aurora, CO 224

Miami-Fort Lauderdale-Miami Beach, FL 176

Average 161

Jacksonville, FL 158

Washington-Arlington-Alexandria, DC-MD-VA-WV 151

Hartford-West Hartford-East Hartford, CT 142

Tampa-St Petersburg-Clearwater, FL 137

Austin-Round Rock, TX 117

Richmond, VA 117

Charlotte-Gastonia-Rock Hill, NC-SC 113

Dallas-Fort Worth-Arlington, TX 112

Portland-Vancouver-Beaverton, OR-WA 109

Phoenix-Mesa-Scottsdale, AZ 105

Kansas City, MO-KS 105

Houston-Baytown-Sugarland, TX 103

Orlando, FL 102

Atlanta-Sandy Springs-Marietta, GA 101

Virginia Beach-Norfolk-Newport News, VA-NC 101

Las Vegas-Paradise, NV 97

Seattle-Tacoma-Bellevue, WA 97

Baltimore-Towson, MD 96

St Louis, MO-IL 94

Chicago-Naperville-Joliet, IL 90

Cleveland-Elyria-Mentor, OH 74

Milwaukee-Waukesha-West Allis, WI 73

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 71

New Orleans-Metairie-Kenner, LA 70

San Antonio, TX 69

Columbus, OH 68

Nashville-Davidson-Murfreesboro, TN 65

Louisville, KY-IN 63

Cincinnati-Middletown, OH-KY-IN 63

Birmingham-Hoover, AL 62

Salt Lake City, UT 61

Memphis, TN-MS-AR 60

Indianapolis, IN 60

Rochester, NY 59

Oklahoma City, OK 57

Buffalo-Niagara Falls, NY 57

Pittsburgh, PA 57

The PMI Risk Index

The PMI Risk Index is a statistical model based on certain measures of economic activity and conditions that PMI believes are predictive of the likelihood of home price declines over the next two years. Factors used to derive the PMI Risk Index include the House Price Index from the Office of Federal Housing Enterprise Oversight, labor market statistics from the Bureau of Labor Statistics and the affordability index, which captures changes in the demand for housing as a function of local median household income and the median mortgage payment.

The PMI Risk Index scale ranges from one to 1,000, where a higher score indicates a higher likelihood of future home price declines. For example, a PMI Risk Index of 100 indicates a 10% chance of a decline in home prices over the next two years.

Because the PMI Risk Index scale is linear, if the PMI Risk Index for an MSA were to increase by 100%, say to 200 from 100, then, according to the PMI Risk Index model, the risk of home price decline has also doubled. Alternatively, if the score were to decline by 50%, for example to 50 from 100, the risk of home price decline has also declined by 50%.

A complete copy of the latest PMI Economic and Real Estate Trends report containing the latest PMI Risk Index scores and analysis is available at: http://www.pmigroup.com/lenders/eret.html.

About PMI Mortgage Insurance Co.

PMI Mortgage Insurance Co. is a leading U.S. residential mortgage insurer, licensed in all 50 states, the District of Columbia and Puerto Rico. Residential mortgage insurance protects lenders and investors against potential losses in the event of borrower default. Private mortgage insurance facilitates the sale of low down payment mortgages in the capital mortgage market and expands home ownership opportunities by enabling borrowers to buy homes with down payments of less than 20%. PMI is incorporated in Arizona and headquartered in Walnut Creek, CA.

Cautionary Statement: Statements in this press release that are not historical facts or that relate to future plans, events or performance are 'forward-looking' statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, PMI's Risk Index and any related discussion, and statements relating to future economic and housing market conditions. Forward-looking statements are subject to a number of risks and uncertainties including but not limited to, the following factors: changes in economic conditions, economic recession or slowdowns, adverse changes in consumer confidence, declining housing values, higher unemployment, deteriorating borrower credit, changes in interest rates, or a combination of these factors. Other risk and uncertainties are discussed in the Company's filings with the Securities and Exchange Commission, including our report on Form 10-Q for the period ended June 30, 2004.

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Contact:

PMI Mortgage Insurance Co.

Josh Wozman, 925-658-6863 (Media)

Matt Nichols, 925-658-6618 (Investor)

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Source: PMI Mortgage Insurance Co.

[Soren]

That surprises the heck out of me. I have to believe that the luxury end of the spectrum is more at risk. I still think Providence is undervalued.

[Cotuit]

Well it does include the entire metro area, and Fall River is currently seeing an unrealistic rise in home prices.

[Garris]

Any surprise Boston is #1 on that list? The only thing about scores like this is that they don't take "desirabilty" or "prestige" into account. A Mercedes, for example, is likely enormously overpriced compared to a Kia since they both accomplish the same thing, but there is a perceived "prestige" factor built in that can drive up the price. The same holds true with neighborhoods, especially ones with intangibles like good school systems or colleges.

- Garris

[ESK]

While house price indexes have reported a downward trend in most MSA's, a new house price index, IAS360 (http://iasreo.com/ias360update.html), I've been following has been reporting small gains at the neighborhood and county level. So far this is the only house price index I've seen analyze at the neighborhood level.