PMI, the largest private mortgage insurer in the U.S has released its Fall Real Estate and Economic Trends. To read the publication click here.

This is a great article to read if you have some time. In summary, the top 10 riskiest markets to invest in according to this report are:

Boston-Quincy, MA
San Diego-Carlsbad-San Marcos, CA
Nassau-Suffolk, NY
Santa Ana-Anaheim-Irvine, CA
Oakland-Fremont-Hayward, CA
San Jose-Sunnyvale-Santa Clara, CA
Riverside-San Bernardino-Ontario, CA
Providence-New Bedford-Fall River, RI-MA
Los Angeles-Long Beach-Glendale, CA
Sacramento-Arden-Arcade-Roseville, CA

Some snippets from the report:

...Home price appreciation rates in Southern California and Las Vegas remain well above the national average, but after reaching a peak in third quarter 2004, they are starting to decelerate. Riverside, CA has moved up three spots to reach seventh position with its Risk Index value escalating from 422 to 466....The labor market continues to expand, but the rate of expansion has slowed considerably in recent months. Las Vegas has also seen skyrocketing increases in home prices. Price acceleration that reached 11.7% the previous quarter has dropped to -1.3% this quarter, signaling that the once-explosive market is decelerating.

.....homes in Florida and the coastal South Atlantic Census Region including Washington D.C., Baltimore, MD, and Virginia Beach, VA, are still experiencing price acceleration as strong labor markets continue to back robust gains in home prices. Declining affordability, however, is elevating their houseprice risk.

Fort Lauderdale and Miami, FL, on the eastern Florida coast, as well as Tampa, FL, on the western coast have all moved up the ranking by two spots. Washington D.C. also continues
to climb up the Risk Index ranking and is now ranked No. 17 as home affordability has reached the low 90s. Baltimore and Virginia Beach are more affordable and are ranked No. 25 and No. 26. Employment growth in Virginia Beach, however, has slowed since mid-2004 with a reduction in military contracting and limited growth in service sectors. Home prices in Northern California have bounced back to grow at nearly the same pace as homes in Southern California. With strong price acceleration, San Jose has moved down our risk ranking by two spots and seen its Risk Index score drop by 41 to 472....San Jose remains weak in generating new jobs, and the economy has not yet recovered the more than 200,000 jobs it has lost since late 2000, but conditions are improving.......

Link to Report (PDF)