Hot home prices in Salt Lake, other cities buck trend

The housing news isn't all grim. Even as prices sag nationwide, there are several cities in the country where home values are climbing smartly.

Boise, Seattle, Salt Lake City, Portland, Ore.; Houston and Austin, Texas; and Charlotte and Raleigh, N.C., are among the cities bucking the national trend. Homes' appreciation there between the fourth quarters of 2005 and 2006 far exceeded the national average of 5.9 percent, according to the Office of Federal Housing Enterprise Oversight. In some markets, like Boise and Seattle, the appreciation jumped well into the double digits.

"All real estate is local, despite the headlines," says Lawrence Yun, the senior economist for the National Association of Realtors. Nationwide, the median existing-home price fell 1.3 percent, to $212,800 in February, from $215,700 in February 2006, according to preliminary NAR statistics.

There's no single secret of these cities' apparent success, but many of them missed the housing boom of the past five years. From 2001 to 2005, annual appreciation in these cities was between 2 percent and 5 percent, far slower than the 7 percent to 12 percent national average, according to OFHEO. (OFHEO calculates appreciation based on repeat sales or refinancings of the same single-family properties.) Now, prices are playing catch-up.

Most of the cities also have one or more strong industries to drive their economies — colleges and technology in Raleigh, banks in Charlotte, energy in Houston and aerospace in Seattle. And all have education levels above the national average.

These cities emerged from the last recession later than most of the country for various reasons, including the lagging technology, aviation and energy industries, says Mark Zandi, CEO of Moody's Economy.com. Now, their economies are strong and housing prices are still perceived as affordable, luring buyers into the market. For instance, the median sales price for a single-family home in the area of Austin-Round Rock, Texas, is $173,700, according to the National Association of Realtors, compared with $371,200 in the Miami-Fort Lauderdale-Miami Beach area.

So many Northeasterners who moved to Florida have resettled in the Charlotte area in recent years — both workers and retirees — that Henry Scala and others in Charlotte refer to them as "halfbacks."