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.

Projected median sales prices for single-family homes:

Q1 2008: $186,350
Q4 2009: $195,060
Growth rate: 4.7 percent

In Austin, the rental market takes a backseat to buyers, many of whom hold high-paying jobs with tech giants like Dell, IBM, and Freescale Semiconductors. Austin's population is well educated - 40 percent have a university degree - and the Texas capital ranks among the top major metropolitan areas for business startups per capita. Austin also has the highest percent age of residents in the coveted 25- to 34-year-old demographic and, not coincidentally, the highest concentration of live music venues in the country. The labor market is so hot that shortages of engineers and product managers are driving double-digit wage hikes in those occupations.

But unlike other creative-class capitals, Austin doesn't price white-collar talent out of the housing market. At $200,000, the median sales price for a single-family home is about a third of that in San Francisco. But the gap is starting to close: While home prices in San Francisco have barely budged since the market peaked in 2005, prices in Austin have risen by 6 percent. That has prompted major builders to lay groundwork for some of the largest new master-planned communities in the country - at the very time that competitors are fleeing other Sun Belt metros.

Dallas-Fort Worth


New Orleans







St. Louis
4 smart housing plays From snapping up condos on the cheap to tapping the social networking craze to find the best deals, there are ways to work the housing slump to your - and your bank account's - advantage. (more)
Real estate rebound Business 2.0 has found 10 housing markets that are near rock bottom and poised to bounce back. (more) video
Where homes are affordable Residents who buy real estate in these 25 towns see their incomes go the furthest. (more)