The average value of a home declined by 25% to 30% from the period from the third quarter of 2005 to the third quarter of last year. The end of 2005 and beginning of 2006 were the peak of the housing boom. S&P argued that home prices could fall another 7% to 10% this year. Many markets have already suffered a drop in housing values of more than half.

It is hard to believe that any market could escape the devastation that has accompanied the collapse of home prices. But there are several relatively large regions where home prices have actually risen. 24/7 Wall St used the Fiserv Case-Shiller Index for all 384 metro areas in the United States, known officially as MSAs (Metropolitan Statistical Areas). We examined the regions where housing prices improved and took the 10 MSAs with the greatest increases in home values. Additionally, markets that did not maintain their highest prices were also excluded. 24/7 also reviewed foreclosure data in each area. This data was provided by RealtyTrac. The assumption was, and it proved to be true, that regions with strong home prices also had low foreclosures rates. Finally, we reviewed the government’s unemployment data on each MSA to look for correlations between joblessness and home prices.

The markets in which home prices have risen since the market collapsed are not concentrated in one part of the country. They share a few things in common. The first is that one or two industries or companies which have continued to do well through the recession employ many local residents. Government jobs fall into this category. Some cities on the list have large universities, state, or federal government offices located within them.

Unfortunately, there is not much to learn from the analysis that can be used as a template for a national recovery in home prices. Most real estate markets do not have a large employment base which has remained stable. On the contrary, cities which have experienced price drops of more than 50% since the real estate peak are almost always in areas where major employers have been nearly destroyed. This included the car towns in Michigan, construction centers like Las Vegas, and retirement centers like Florida and Arizona.

It is not scientific to assign luck as the reason that something like housing has done very well or very poorly. But, the cities on this list show that factors which are arbitrary and beyond the control of homeowners are essentially what have kept prices high compared to a national market which has been a disaster. Better to be lucky than good.

1. Longview, TX Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 25.9%
> Change in Home Prices (Peak – 2010 Q3): 0.0%
> Prices Reached Peak In: 2010 Q3
> Population (2009): 206,870
> Unemployment (Dec. 2010): 7%

Longview, the principal city of the Longview, TX Metropolitan Statistical Area (MSA), is a growing city thanks to its strong education, healthcare, and manufacturing industries. The city is home to Eastman Chemical, Trinity Rail, and LeTorneau Technologies. The area’s economy is also boosted by the East Texas Oil Field, which has 30,340 historic and active oil wells and includes parts of all three counties in the Longview metropolitan area. The MSA features the thirteenth lowest foreclosure rate in the country for metropolitan areas with 200,000 people or greater – only 0.4% of properties have filed for foreclosures as of the end of 2010.

2. Bismark, ND Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 19.1%
> Change in Home Prices (Peak – 2010 Q3): 0.0%
> Prices Reached Peak In: 2010 Q3
> Population (2009): 106,290
> Unemployment (Dec. 2010): 3.9%

Bismarck is the capital of North Dakota, and the state’s government is by far the largest employer in the city. Other major employers include the St. Alexius Medical Center, Medcenter One Health Systems, Basin Electric Power Cooperative, and Midwest Motor Express. The Bismarck, ND Metropolitan Statistical Area’s unemployment rate is 3.9%, which is dramatically lower than the national average of 9.4%, although North Dakota generally has the lowest unemployment rate in the country, at 3.8%.

3. Williamsport, PA Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 18.4%
> Change in Home Prices (Peak – 2010 Q3): 0.0%
> Prices Reached Peak In: 2010 Q3
> Population (2009): 116,840
> Unemployment (Dec. 2010): 8.3%

Williamsport’s economy is largely supported by Avco Corporation, library supplies company Brodart, and vacuum manufacturer Shop-Vac. Recently, hundreds of new natural gas wells have been drilled in the surrounding area, boosting the economy and offering a potentially huge new source for industry. These gas wells also offer incentive for new residents to move to the area.

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4. Altoona, PA Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 18.3%
> Change in Home Prices (Peak – 2010 Q3): 0.0%
> Prices Reached Peak In: 2010 Q3
> Population (2009): 126,120
> Unemployment (Dec. 2010): 7.2%

Although Altoona has faced some of the industrial decline which has hurt so much of Pennsylvania, it has managed to keep a healthy housing market throughout the recession thanks to the area’s paper manufacturing industry. Unlike the rest of the world, the paper manufacturing industry in the Altoona MSA has consistently grown, employing more people every year. As of 2010 Q3, the median home price had continually increased since the third quarter of 2005.

5. Clarksville, TN-KY Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 17.1%
> Change in Home Prices (Peak – 2010 Q3): 0.0%
> Prices Reached Peak In: 2010 Q3
> Population (2009): 268,550
> Unemployment (Dec. 2010): 9.9%

Although the Clarksville, TN-KY MSA has an unemployment rate that is greater than the national average, Clarksville, TN, the area’s principal city, is home to a number of major employers. These employers include Trane, SPX Corporation, Convergys Corporation, and Fort Campbell, the United States Army base. Some 1.05% of housing units in the Clarksville MSA had foreclosure filings on them in 2010.

6. Shreveport-Bossier City, LA Metropolitan Statistical Area

> Change in Home Prices (2005 Q3 – 2010 Q3): 16.4%
> Change in Home Prices (Peak – 2010 Q3): 0.0%
> Prices Reached Peak In: 2010 Q3
> Population (2009): 391,520
> Unemployment (Dec. 2010): 6.6%

Shreveport, LA was once the home of Standard Oil of Louisiana, however a downturn of the gas and oil industry in the 1980s hurt the area’s economy. The city has since reestablished its economy with particular focus on industries such as medicine, gaming, tourism, and even film. In 2008, potential for a major resurgence of the natural gas industry arose in the form of the Haynesville Shale, which could turn out to be a major shale gas resource, although it has yet to be fully tapped. In 2010, 0.82% of properties in the Shreveport-Bossier metropolitan area were foreclosed on.

7. Utica-Rome, NY Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 15%
> Change in Home Prices (Peak – 2010 Q3): 2.2%
> Prices Reached Peak In: 2007 Q1
> Population (2009): 293,280
> Unemployment (Dec. 2010): 8.1%

The median price of homes in the Utica-Rome metropolitan area increased significantly after peaking in the first quarter of 2007. The area also has the lowest foreclosure rate for MSA’s with 200,000 or more residents, with only one in every 2,268 homes (0.04%) foreclosed on in 2010. Utica-Rome is the only MSA on this list that is expected to undergo a further increase in home prices between the third quarter of 2010 and the third quarter of 2011, based on Fiserv data about local employment, foreclosure rates, and unique market trends.

8. Monroe, LA Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 14.9%
> Change in Home Prices (Peak – 2010 Q3): 0.1%
> Prices Reached Peak In: 2009 Q3
> Population (2009): 174,090
> Unemployment (Dec. 2010): 7.7%

The relatively small Monroe, LA metropolitan are increased average home prices after its original peak in the third quarter of 2009. The area has steadily brought in more people for office and service jobs. Monroe is home to CenturyLink, the eighth-largest telecommunications provider in the nation, which plans to acquire Qwest. The metropolitan area also has a prominent agricultural industry, due to the Ouachita River.

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9. Grand Forks, ND-MN Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 14.5%
> Change in Home Prices (Peak – 2010 Q3): 0.0%
> Prices Reached Peak In: 2010 Q3
> Population (2009): 97,190
> Unemployment (Dec. 2010): 4.3%

Grand Forks’ unemployment rate is less than half of the national average. The principal city’s economy can be divided into many sectors, including agriculture, education, defense, health care, and manufacturing. The economy is growing because of the ever-expanding and diversifying agricultural industry, aiding the area’s housing market.

10. Morgantown, WV Metropolitan Statistical Area
> Change in Home Prices (2005 Q3 – 2010 Q3): 14.3%
> Change in Home Prices (Peak – 2010 Q3): 0.0%
> Prices Reached Peak In: 2010 Q3
> Population (2009): 120,330
> Unemployment (Dec. 2010): 6.5%

Morgantown, WV features a generally healthy economy. In 2009, the MSA and its principal city featured the lowest unemployment rate in the country, although it has since increased some. The area’s leading economic industries are healthcare, education, and government. The economy is also helped by the presence of West Virginia University.

Charles Stockdale & Douglas A. McIntyre

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