At least two communities in California's Central Valley have moved into "home price bubble territory" and are at high risk for price declines, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm.The communities of Modesto and Merced are the communities most vulnerable to a fall in home prices in the near to medium-term future and to the probability of a concurrent rise in mortgage defaults, said Alexis McGee, president of ForeclosureS.com. "Several economists, including building industry consultant John Burns of Irvine, rank Modesto as No. 1 among cities in the U.S. that are in a home price bubble," Ms. McGee said. "And Burns ranks Merced as No. 5." The company can be found online at http://www.foreclosures.com.

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