Two California newspapers react to the PMI report. "Orange County has a 58.9 percent chance of seeing home prices decline in the next two years, the second-highest rate among the nation's 50 biggest metropolitan areas. Only San Diego County had a higher 'risk index' rate."

"San Diego's risk of price declines was 59.8 percent, the report said. Riverside and San Bernardino counties tied with the fifth-highest risk rate (57.9 percent), and Los Angeles County had the ninth highest (56.3 percent). In addition, Orange County had the second lowest affordability ranking, meaning that the local housing market is among the most susceptible to 'local economic shock.'"

"The area's home prices have a 60-percent chance of dropping, one of many factors making San Diego the riskiest real estate market in the nation, according to a quarterly report put out by a California mortgage insurer."

"'You guys are leading the nation, congratulations,' remarked Chris Thornberg, a senior analyst at UCLA."

"Last year at this time, the quarterly report ranked the San Diego region as the fifth-riskiest market in the nation. That report put Boston as the riskiest. San Diego's took a hard knock because the area's homes are among the least affordable in the nation, according to PMI's data, and that means the people who buy them are more likely to default on their mortgages. The area is also suffering from a slowed price appreciation."

"Gary London said the report adds to the 'parade of statistical indicators' showing that the real estate market is slowing. People who have bought in the last year and who need to sell this year, or people who have entered into mortgages that they simply cannot afford..should probably be concerned at the signals the market is giving off, he said."

"Stephanie Corns, a spokeswoman for PMI, said that people looking to buy a home need to consider how risky an area is before buying there. That's especially important when a buyer is considering buying their home using a non-traditional loan such as an interest-only mortgage, she said."

"'Some of the exotic (loan) products transfer a lot of the risks to the borrower, so you really need to gauge what amount of risk you are comfortable taking on. Are you comfortable having a lot of risk in your mortgage and a lot of risk in your market area?'"

"Topping out the top five riskiest markets in the nation were Santa Ana/Anaheim/Irvine; Boston; Nassau/Suffolk, New York; Riverside/San Bernardino; and Sacramento."