Thirteen real estate market areas have more than a 50 percent chance of falling house prices within two years, and eight of those areas are in California, three are in Massachusetts, one is in New York and one is in New Jersey, according to a quarterly report by PMI Mortgage Insurance Co., a subsidiary of The PMI Group Inc.

Twenty-five metropolitan areas had increasing risk of price declines, compared to the previous quarter, while 20 had decreased risk, the PMI U.S. Market Risk Index also revealed.

“Certainly the coastal markets have been the highest-risk markets pretty consistently, said Beth Haiken, a PMI Group spokeswoman. Some markets in Florida and the Washington, D.C., area have gradually climbed on the risk index list, she noted.

Price appreciation from first-quarter 2005 to first-quarter 2006 has dropped into the single digits for three of the 10 top high-risk markets, including San Diego, 7.7 percent; Boston, 5.7 percent; and Providence, R.I., 9.5 percent.

For the previous quarterly index, Boston was the only market area with that distinction, Haiken said.

Those major real estate markets at the greatest risk of a price decline, according to the index, are San Diego-Carlsbad-San Marcos, Calif.; Nassau-Suffolk, N.Y.; Boston-Quincy, Mass.; Santa Ana-Anaheim-Irvine, Calif.; and Sacramento-Arden-Arcade-Roseville, Calif.

Sacramento made its appearance in the top-five riskiest markets for the first time.

“We’re seeing some continuing high risk and deceleration. On the other hand we’re seeing continued very high appreciation in a lot of areas,” she said. “The other thing that’s really working to balance things out is the underlying labor market fundamentals. Employment growth continues to be strong.”

Six markets had price appreciation above 20 percent from first-quarter 2005 to first-quarter 2006, including Phoenix at 31.1 percent; Orlando, Fla., at 27.7 percent; Fort Lauderdale, Fla., at 25.7 percent; and Miami at 24.7 percent.

The index relies on past house-price growth and statistics for employment, unemployment, local income and interest rates in the largest metropolitan statistical areas and metropolitan statistical area divisions. An index rating of 500 or more indicates a 50 percent or greater risk of home-price declines in the next two years, while an index rating of 100 suggests a 10 percent probability of falling house prices.

The top-five riskiest markets have index ratings between 585-599. The average index score for the 50 real estate markets studied was 288, which is a 70-point increase compared to first-quarter 2005. But this average score is up just one point from the previous quarterly index.

Newark, N.J., and Miami led the list of real estate markets for the highest quarterly gain in risk. Both cities jumped 32 points in the index, with Newark rising to a score of 459 and Miami rising to a score of 359.

The Las Vegas metro area led the nation with 6.23 percent employment growth this year compared to 2005, according to the report, followed by Phoenix, Ariz., at 6 percent; Orlando, Fla., at 4.5 percent; Fort Lauderdale, Fla., at 4.4 percent; and Seattle, Wash., at 4.3 percent.

Employment declined in four market areas, including Detroit, Mich., down 1.1 percent; Milwaukee, Wis., down 0.8 percent; Warren-Troy-Farmington Hills, Mich., down 0.6 percent; and Cleveland, Ohio, down 0.1 percent.

Home-price appreciation has slowed in about 34 major real estate markets across the country but is still positive in all of the nation’s 50 largest markets, PMI reported.

The decline in appreciation was steepest in Las Vegas, dropping to 14.5 percent for the period from first-quarter 2005 to first-quarter 2006. That is down 15.6 percent when compared to the appreciation rate of 30.1 percent from first-quarter 2004 to first-quarter 2005.

The year-over-year appreciation rate dropped 15.3 percent in the San Diego metro area and fell 11.4 percent in the Sacramento area.

“We’d reached a point where prices had gotten too far away from economic fundamentals,” said Mark Milner, chief risk officer for PMI Mortgage Insurance Co., in a statement.

“This quarter’s data signals that in many areas the expansion of the housing balloon has slowed substantially. The risk index also shows that slowing price appreciation is balanced by underlying economic strength. In the absence of an unexpected economic shock, this makes a gradual cooling of the market the most likely outcome.”

Affordability increased slightly in 19 markets, including five in Texas and six in the Midwest, PMI reported. Fort Worth-Arlington, Texas, was the most affordable area on the list, followed by Indianapolis-Carmel, Ind. The least affordable market area in the latest index was Fort Lauderdale, Fla., followed by Riverside, Calif., and Los Angeles.

Those metro areas with the lowest risk rating include Pittsburgh, Pa., at 57 (a 5.7 percent risk of home-price decline within two years); Indianapolis-Carmel, Ind., at 58; Memphis, Tenn. (including areas in Mississippi and Arkansas), at 61; Cincinnati-Middletown, Ohio (including areas of Kentucky and Indiana), at 64; and San Antonio, Texas, at 65.

Haiken said that while the survey is intended to measure short-term price risk, long-term home ownership generally leads to a positive return on investment. “(Some consumers) have had almost a day-trader mentality recently about real estate,” she said, noting that those who are looking for a quick buck could face short-term volatility in market conditions. “In the long term it’s been a very good investment,” she added.

An “Economic and Real Estate Trends” report released by PMI today contains an analysis by economist Charles A. Calhoun on possible best-case and worst-case home-price scenarios for four metro areas: Boston, Los Angeles, Pittsburgh and Houston.

For Boston and Los Angeles the analysis suggests “the strong likelihood of positive house-price appreciation over the next 10 years,” while in Pittsburgh the data suggests “much lower expected appreciation, and very little chance of either very high or very low rates of appreciation.”

Meanwhile, the data suggests that Houston will have positive appreciation on average, but at a lower rate than Boston or Los Angeles.

A separate article in the report suggests that alternative mortgage products such as 40-year and 50-year mortgages “hold some benefit over more risky alternatives, such as piggyback loans, interest-only loans and option adjustable rate mortgages.

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