Large cities in California and Florida - including Los Angeles and Miami - continue to face a "high" risk of near term declining home prices, according to a recent report issued by the PMI Group. Of the 16 'metropolitan statistical areas' the company grades as "high" risk, eight are in California, five in Florida, and one each in Arizona, Nevada and Rhode Island. Factors feeding expected home price declines include foreclosures, unemployment and how much equity a borrower has in his/her home. In California, the only bright spot PMI found is that the inventory of homes for sale is beginning to decline. In June there was a 7-month average supply of unsold homes compared to 14.1 months in November 2007.
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