If youre hoping for cheaper California housing, one mortgage insurer says dont bet on it.

California tied 28 other states for the lowest-risk housing markets nationwide, according to Arch MIs latest housing-risk study. Arch MI melded year-end housing and economic data, which revealed only a 2 percent chance California homes prices would fall in the next two years — a rating unchanged in a year.

Nationally, price risks are nudging a wee bit higher. The number of states at “minimal” risk — 2 percent — fell by five since year-end 2016. And the overall national chance for price declines rose to 5 percent from 2 percent during 2017.

FYI, the highest shot at housing depreciation is in Alaska (28 percent chance), by Arch MI math. Next is North Dakota (27 percent), followed by Wyoming (25 percent), West Virginia (24 percent), Florida (15 percent), and Connecticut, Oklahoma and Texas (all 14 percent).

So what does Arch MIs California data show that might be comforting to property owners? Here are five reasons the market looks stable …

1. Jobs-Jobs-Jobs: More paychecks, more potential buyers. California averaged a 4.4 percent unemployment rate in the fourth quarter. And while thats No. 21 highest nationally, and may be above the national rate of 4.1 percent, its well below the states historic 7.3 percent joblessness dating to 1976 — No. 6 among the states. And Californias one-year dip in unemployment of 0.8 percent was No. 7 best. Nationally? Joblessness fell 0.7 percent.

2. Wealth: Theres plenty of money in California with $71,157 of per-capita gross domestic product, one measure of household income derived from comparing statewide business output vs. population. That metric grew 4.9 percent in 2017, the fifth-fastest among the states. Nationally, business output grew 3.7 percent.

3. Limited new supply: Remember, extra choices can depress prices. California developers last year started building single-family homes at a pace thats the tenth slowest among the states and slightly more than half of the national rate. But California is playing catch-up: The one-year rise in this homebuilding metric was No. 2 largest among the states and nearly triple U.S. growth.

4. Population grows, albeit slowly: More people means more demand for housing. California added residents at a 0.6 percent annual pace, No. 21 fastest among the states but behind the national 0.72 percent growth. Moderate population expansion helps explain Californias proportionally feeble homebuilding patterns.

5. Rising home values: Solid demand is reflected in higher California prices: Up 8.2 percent in a year, eighth highest — and above the nations 6.6 percent gain. In the previous 12 months, California homes appreciated 6.8 percent, No. 11 best, and slightly ahead of national 6 percent increase.


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