The alarm sounded by news outlets across the nation about dramatically dropping home prices should fall on deaf ears in this part of Texas, according to experts.

They see a continuing strong market in Bell County in general and in Temple in particular, with no dip in sight.

Their observations are backed up by a just-released report from The PMI Group Inc., an international mortgage insurance company.

The report includes the PMI U.S. Market Risk Index, an estimate of the probability that home prices in specific metropolitan areas will be lower two years from now than they are today.

Bell County and Temple fall in the least risky category, along with other metro areas in Texas.

That, of course, is not the trend for housing prices on the coasts, where home prices have tanked and bankruptcies and foreclosures have soared.

Twenty-one of the nation’s 50 largest metropolitan statistical areas (MSAs) moved into higher risk categories on the PMI index in the new report. None moved toward less risk that home prices will drop.

The areas with higher increased risk were in Florida, California, Nevada and Arizona, but also in the Rust Belt of the upper Midwest.

“This really confirms what we’re thinking,” said Terri Covington, president of the Temple-Belton Board of Realtors. “People see on TV or read the national news and assume it applies to the whole nation, but our general area has remained fairly positive.”

“I agree with them 100 percent,” said Dr. Larry Woodward, a business professor at the University of Mary Hardin-Baylor in Belton. “Those are areas where they had the speculation bubble. Now, prices are returning to their true value.”

In some of the areas hardest hit by the housing slump, prices for homes had appreciated by as much as 20 percent a year for several years, luring speculators into the market and inflating prices.

Across the nation, the housing market has been very volatile.

“Over the past year, home sales have dropped by 22 percent, single-family housing starts have plummeted by almost 35 percent, and nationwide, home values have slipped by about 4.5 percent, according to David W. Berson, chief economist and strategist with The PMI Group Inc.

Nothing even close to that has happened in Temple.

During 2007, home sales remained steady month after month. January got off to a typical slow start, with 108 sold. But the numbers steadily rose to a peak of 207 in both May and June. September, October and November slowed down somewhat.

Prices also held steady throughout 2007. The median sales price ranged from a low of $99,000 in January to a high of $125,900 in June. (The average cost of a new home here is about $170,000, though, according to figures from the National Association of Home Builders.)

“Based on people I talk to - realtors, builders and the builders association - they all agree that this is probably one of the most solid parts of the country and certainly one of the most solid parts of Texas (in terms of housing),” said Paul Cox of Salado, senior loan officer with Mortgage Acceptance Corp.

Like The PMI Group Inc., both Woodward and Cox see not just stability but growth in the Bell County area well into the future.

“In a few years, you’ll see some phenomenal growth,” Cox said. “Assuming the economy remains relatively strong.”

He was simply echoing words spoken here last fall when Elliot Eisenberg, senior economist with the NAHB, came to Temple and talked to home builders. He said, “This is one of the most affordable communities in the country, and that’s what gives you the competitive edge.”

In addition, Temple has plenty of houses on the market, which works to keep a check on prices.

Throughout 2007, the inventory ranged from a low of 879 houses for sale to a high of 1,056 in October.

“I’m excited about the next five to 10 years,” Cox said, noting that he moved to Salado from Austin to get out of the big city but also because of the opportunities he sees to grow his own business.

“We’re very fortunate we’ve got people moving in, and they’re needing homes, and we’re going to be ready to sell them,” Covington said.

cwilson@temple-telegram.com