Douglas County home prices have only a slim chance of slipping during the next two years, according to a national study of housing trends.

The Lawrence metropolitan statistical area, which includes all of Douglas County, stands a 6.3 percent chance of seeing home prices decline by the summer of 2007, according to the study by PMI Mortgage Co., a major insurer of home mortgages.

While economists fret about the prospect of the nation’s housing “bubble” popping soon – a bust they fear would deflate the net worth of many Americans, giving rise to a recession – professionals who follow the Lawrence area’s real estate market say they don’t see much point in worrying.

The last time housing prices dropped in Lawrence and Douglas County came five years ago, as the stock market crashed, and the decline didn’t last long. Home prices jumped by 20 percent a year later, and have been on the upswing ever since.

Lisa Ramler, president of the Lawrence Board of Realtors, likes the area’s chances of weathering a decline, however unlikely – as the PMI study indicates – it might be to arrive.

“If somebody said, ‘Take this $1,000 and invest it, and you have a 6 percent chance of losing it,’ there’s a pretty good chance you’re going to be OK,” said Ramler, a Realtor for Realty Executives Hedges Real Estate in Lawrence. “Six percent? That’s a very, very small risk in business.

“I know it’s our homes and our equities, but it’s still a business transaction to me. It’s like any investment: If you turn it in a year, you’re not going to make a lot of money. It’s a long-term investment. Six percent? I’ll take that chance.”

So will August Dettbarn. As appraisal manager for Douglas County, he tracks factors that can shape the area’s real estate values.

Young families continue to move up from apartments into townhomes and single-family homes, he said, and Baby Boomers – fast becoming retirees – are looking for homes in a college community, where they can lead active retirements.

Dettbarn sees no reason to fear a “bubble” in Lawrence, much less one popping anytime soon.

“We’ve talked about it, and we’ve tried to find it, but we don’t see it,” said Dettbarn, who has been tracking values for 18 years. “What we do see, each year, is that properties do increase in value. Somebody that buys it, holds it for a couple years and then trades up to a better house, he’s able to sell it for more money than what he bought it for.”

Dettbarn scoffs at the thought of comparing Lawrence to hot markets in California, where reports of someone buying a house and then selling it two months later for a $50,000 profit are not uncommon.

“When you look at it, our 4 to 5 percent increase per year, on average, pretty well matches how much everything else is going up – the stock market, the bond markets, the other places where you can place your money. But I don’t know too many other investments – except California real estate – where you’re seeing that kind of return: Two months and you can double your money? … That, to me, sounds like a bubble.”

The PMI study agrees, relatively to other markets.

The U.S. housing market most likely to be hit by a price drop is Santa Barbara-Santa Maria-Goleta, Calif., according to the study. The southern California area stands a 56 percent chance of losing value in the next two years, after watching home prices surge 23.7 percent there during the past year.

The PMI study calculated a “risk index” for 379 U.S. metro areas by factoring in each area’s home-price acceleration, employment growth, unemployment rates and housing affordability.

The markets least likely to face a drop in home prices: Wenatchee, Wash., and Yuma, Ariz., which tied in the study with risk factors of 5 percent.

Risk factors for communities closer to home:

¢ Wichita, 5.9 percent.

¢ Topeka, 7.3 percent.

¢ Kansas City, 8.9 percent.