Two new national indexes that measure real estate risk -- and buying opportunities -- came out last week, and they offer some geographical pointers for investors.

Title insurance giant PMI Group's quarterly metropolitan area risk list covers 381 markets, and ranks them according to the probability of real estate price declines during the next 24 months.

The thinnest ice-where PMI forecasts further drops in values -- continues to be in once-booming, speculator-driven markets that haven't quite finished their downward cycle.

The 10 areas most likely to see real estate price declines: Tops on the list is Riverside-San Bernadino, California, once the epicenter of double-digit price inflation, but now suffering from one of the highest foreclosure rates in the country.

Investors can definitely pick up deals there, but they shouldn't expect a bottoming out on prices or turnaround before 2011.

Number two on the PMI list: Miami and Miami Beach. No surprise here either, because the south Florida market is weighted down by a couple of years' worth of unsold condos.

In third place is Fort Lauderdale, just up Interstate 95 from Miami, and loaded down with similar problems. Next comes Los Angeles, which is a bit of a surprise since LA -- with its highly-distinctive sub-markets ranging from posh Beverly Hills to central city neighborhoods -- hasn't performed as badly in statistical terms as other parts of the state.

But PMI rates LA as having a 99.8 percent probability of further price declines over the coming 24 months.

Rounding out the riskiest 10: West Palm Beach; Las Vegas; Tampa-St Pete; Orlando; Anaheim, California; and Jacksonville, Florida.

The least risky markets to put your investment dollars if you want to avoid short-term valuation losses, according to PMI: Texas dominates the list: Dallas, Ft. Worth, Houston and San Antonio are all in the top five. But Pittsburgh, Charlotte, Cleveland, Denver and Indianapolis also are among the safest bets to grow property values in the next 24 months.

A second quarterly real estate index comes from HomeVestors, whose franchisees across the country buy thousands of what they call "ugly" houses a year, fix them up, rent them out, or resell them at a profit.

Based on volume of purchases in the final quarter of 2008, HomeVestors ranks Dallas, Houston, San Antonio, Fort Worth and Denver among their top 10 opportunity markets.

So their index is pretty much in sync with PMI's, but Home Vestors includes Milwaukee, Philadelphia, Minneapolis and Atlanta as top turnaround opportunity markets as well.

Published: January 23, 2009

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.