VIA THE WASHINGTON EXAMINER:

The Washington area is still at high risk for drops in housing prices by the end of next year, despite a recent uptick in home sales and prices, according to a new report.

There is a 77 percent chance that local home prices will be lower in the fourth quarter of 2011 than in the fourth quarter of 2009, according to the second-quarter 2010 Risk Index published by PMI, a mortgage insurance company.

Though the figure declined from an 89 percent chance from the third quarter of 2009, the report still classified the area’s risk of price declines as “high.”

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The area’s unemployment rate and affordability ranked relatively well, but prices — which declined 15 percent year-over-year from the fourth quarter — really hurt Washington’s score, said PMI spokesman Joel Luebkeman.

Updated data from the first quarter, though, showed price stabilization, Luebkeman said.

“If all other factors remain the same … you would expect the risk score for the D.C. area to show additional improvement,” he said.

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