By - Jersey Gilbert

(MONEY Magazine) – One way to gauge what's ahead for your real estate market is to look up your local banks' problem property loans. If the number of bad loans is increasing, chances are local property prices will continue to fall. The map above, using information provided by Veribanc, a Massachusetts bank research firm, shows (in red) 19 states and Washington, D.C. where banks and thrifts saw the percentage of problem loans in their real estate portfolios jump by 20% or more during the most recent 12-month bank reporting period (ending Sept. 30, 1990). District of Columbia institutions fared the worst, with the bad real estate loan level rising more than fivefold to reach 11.35% of their total real estate lending, up from 1.72%. On the other hand, states shaded purple, as well as Alaska (not pictured), show recovery signs. Lenders in Texas, the epicenter of the thriftquake from 1985 to 1989, have shaved their problem real estate loan ratio to 13.68%. That's still third worst in the nation after Arizona and Oklahoma, but it's down more than one-third from 1989 levels. In the 14 states colored yellow, the level of problem loans has not changed much. The nine states in green, plus Hawaii, are the best off: 97% or more of their real estate loans are solid.