The Next Time You Hear: "It's a great time to buy a house"

Grab the 2007 PMI mortgage study report and proceed to sit down in your seat and fasten your seatbelt. California real estate values are predicted to go "down town" in two years:

Some homeowners in California, Florida and the southwestern U.S. now face more than a 60 percent chance their property will be worth less in two years, according to a new study by a mortgage insurer.

The index found that 15 of the 50 largest metro areas in theU.S. have a
greater than 50 percent chance of seeing price drops.Eleven of those markets are
in California and Florida, including Los Angeles and Miami. These are areas that
enjoyed some of the largest price run-ups during a five-year housing boom
that ended nearly two years ago.

"What the markets with the greatest risk of decline have in common is a
history of price volatility: rapidly rising rates of price appreciation above
the long-term average followed by a recent sharp slowdown in the rate of
appreciation," said Mark Milner, PMI's chief risk officer.The riskiest of all
markets are Riverside, California; Phoenix; Las Vegas and West Palm Beach,
Florida — each with a greater-than-60 percent chance of depreciation.

Realtors throughout California love to pat themselves on the back for the fantastic appreciation in home values over the last 5 years.

Do these new findings by PMI mean that one can expect to see Realtors flogging themselves over the next 2 to 5 years when the market comes to a complete and horrifying crash?

The answer is yes, only they won't be doing so literally. Maybe verbally.

"All real estate is local. We're just going through a slight market correction right now."

"Now that the only the serious buyers remain and the speculators have been removed from the market, we can fully expect normalcy of supply and demand to continue as before."

"What we're experiencing is a normal adjustment of the real estate market business cycle."

"We're bound to experience a few bumps along the way."

Hey, have you ever noticed how the real estate sales pitches sound so similar to that of the airline industry's intercom announcements from the pilot?

"We're experiencing a little turbulence. Please take your seat and fasten your seatbelts."

"We'll be serving a little snack"

"We're gonna be a little late."

So yeah, the next time you hear a realtor say to you: "Hi! It's a great time to buy a house", just take your seat and fasten your seatbelts. This means the housing market is about to crash.