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 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.

St. Louis
St. Louis
Projected median sales prices for single-family homes:

Q1 2008: $143,920
Q4 2009: $149,710
Growth rate: 4.0 percent

St. Louis's annual per capita income of $36,000 matches the national average, and the metro's economic growth rate closely tracks that of the overall U.S. gross domestic product. Its workforce is light on the kind of high-skilled techies that have made places like Silicon Valley and Raleigh-Durham boom - but then again, the middle of the road is a good place to be during a national housing meltdown. The boom-and-bust fluctuations in hot markets were only felt as ripples here.

Craig Heller, a local developer who owns a company called Loftworks has placed his bets on converting historic buildings and warehouses in the urban core into condos, selling the units at an average of $275,000 a pop. He expects downtown loft prices to increase substantially this decade, thanks to reverse migration from the suburbs.

At the same time, a different brand of gentrification is starting to emerge in outlying towns that have been absorbed by St. Louis's sprawl. Speculators are buying traditional country homes at a discount in enclaves like Glendale, Kirkwood, Sunset Hills, and Webster Groves. They then tear them down and put up McMansions that list for multiples of the property's original sales price.

Dallas-Fort Worth


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St. Louis
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