Recovery in Best 25 Housing Markets

As the U.S. undergoes the most severe down turn in its housing markets since at least the Great Depression, at least 25 local markets are progressing through the transition forecast to experience housing price inflation during the remainder of 2011.

Driven by a U.S. military realignment program and a robust local economy El Paso, Texas located on the border of Mexico takes the #1 position. El Paso is now forecast to lead the nation in home price inflation for the year at an average of 3.7%. The city that boarders one of the most violent communities in Mexico, Juarez suffers little fall-out from their southern neighbors drug wars and is a growing metropolis.

The Tri-Cities, which includes Richland, Kennewick and Yakima in south-eastern Washington State takes second position. The Tri-Cities economy is also bolstered by federal monies. A former bomb making plant is now a large Superfund site being cleaned up at tax payers’ expense, and the housing shortage is projected to send local home prices higher.

A large number of cities in North Dakota, South Dakota and Iowa made the list. Although all of the markets are forecast to experience modest appreciation over the course of the year, at least it’s in the right direction. All three states experienced little subprime and Alt-A mortgage lending during the real estate boom.

Eight cities have been eliminated from the best 25 list with their markets projected to move into negative territory over the second half of the year, including communities in Maine, Maryland and Kansas. The three appeared promising at the start of the New Year, but troubles with the economy, higher unemployment and other difficulties leave the markets behind.