New Rules of Real Estate 2007

How to play the real estate bounce-back

The housing market may be melting down, but Business 2.0 worked with Moody's Economy.com to identify 10 cities that have just about hit rock bottom - and offer opportunities for savvy investors to get in while the getting's good.

Montgomery
Montgomery
Projected median sales prices for single-family homes:

Q1 2008: $140,020
Q4 2009: $147,690
Growth rate: 5.5 percent

While layoffs from domestic carmakers depress the economies of northern Rust Belt cities, South Korean car company Kia is injecting jobs into Alabama's Interstate 85 corridor. The new jobs will boost the local economy and light a fire under housing prices. With the city's buildable land filling up, prices will spike.

Earl Martin, general manager of Aronov Realty, says prices will rise the most in new subdivisions on Montgomery's east side, as well as in the small towns along I-85. Other hot spots are bedroom communities like Wetumpka, 15 miles to the north in the so-called river region.

The other pocket seeing a resurgence is Old Cloverdale, a historic neighborhood in the heart of Montgomery where F. Scott Fitzgerald lived during the jazz age. Call it a trickle-down tax effect. After a decade of stagnation, the state government has been on a hiring spree for two years. The oversize public payroll is well represented in Montgomery's center, where about 9,000 state employees work alongside the staffs of 100 different trade associations and lobbying firms.

Dallas-Fort Worth

Indianapolis

New Orleans

Atlanta

Montgomery

Memphis

Mobile

Austin

Houston

St. Louis
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Where homes are affordable Residents who buy real estate in these 25 towns see their incomes go the furthest. (more)
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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.