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.

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

Q1 2008: $154,850
Q4 2009: $161,910
Growth rate: 4.6 percent

Downtown Houston is also one of the places to be these days. The Texas oil capital is notorious for its suburban sprawl and horrendous traffic jams, but within the so-called Inner Loop bounded by Interstate 610 lies a new land of opportunity. That's where a multibillion-dollar expansion of Houston's medical center has spurred an influx of high-earning workers looking to live nearby.

Commuting to the center of the city has gotten worse in recent years, so suburbanites are flocking to the Inner Loop to snatch up older homes just for their lots and location. The trend is none too surprising, given that Houston is the only major U.S. city with no formal zoning code, which makes purchasing older houses and tearing them down to build whatever you want pretty easy. New homes on old lots start at about $1 million and reach as high as $4 million. Meanwhile, Big Oil is keeping Houston humming; the city added nearly 100,000 jobs last year.

Dallas-Fort Worth

Indianapolis

New Orleans

Atlanta

Montgomery

Memphis

Mobile

Austin

Houston

St. Louis
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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 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.