What Housing Has Done in Your City

I pointed out yesterday that, adjusted for inflation, nationwide home prices are now about where they were in the late 1980s. This backs up a point Yale economist Robert Shiller told me a few months ago: In real (inflation-adjusted) terms, we shouldn't be surprised if housing falls for the next several decades. It's happened in the past, and it could happen in the future.

Some reminded me that this is misleading: Housing is all about location, location, location. Some regions -- particularly those growing faster than the overall economy -- will do much better than others.

That's absolutely right. I pulled up the regional version of the S&P Case-Shiller Housing Index to see how different regions have fared over the last one-, two-, and 10-year periods. Have a look:

City/Region

Home Price Change, Year Over Year

Home Price Change, 2009-2011

Home Price Change, 2001-2011

Phoenix(3.6%)(9.8%)(10.5%)
Los Angeles(5.4%)(3.5%)35.0%
San Diego(5.4%)(3.0%)16.8%
San Francisco(5.5%)(5.1%)0.7%
Denver(0.2%)(2.7%)2.2%
Washington, D.C.0.5%3.1%46.9%
Miami(4.4%)(7.9%)10.8%
Tampa, Fla.(6.1%)(10.3%)3.9%
Atlanta(11.7%)(18.5%)(19.7%)
Chicago(5.9%)(13.0%)(5.0%)
Boston(1.6%)(2.3%)15.4%
Detroit3.8%(2.3%)(36.9%)
Minneapolis(5.0%)(9.0%)(11.6%)
Charlotte, N.C.(2.0%)(6.3%)6.5%
Las Vegas(9.2%)(12.4%)(20.0%)
New York(2.3%)(4.0%)32.5%
Cleveland(1.1%)(5.5%)(7.7%)
Portland, Ore.(4.8%)(11.4%)22.1%
Dallas(0.8%)(4.9%)2.4%
Seattle(6.3%)(10.8%)17.3%

Sources: S&P Case-Shiller and author's calculations. Figures not adjusted for inflation.

The standouts for me: Washington, D.C.'s rise over the last decade is still huge (thank you, government spending), Atlanta's 10-year decline is about the same as Las Vegas', and the 10-year gain of some big cities (New York, Los Angeles, Portland) is still considerable.

So yes, it is all about location. But big trends can still be noticed on a nationwide level. While home prices nationwide could drag on lethargically for years, I'm reasonably confident that home construction will make a solid rebound sooner than some expect. That could be good for the economy, and great for companies like KB Homes (NYS: KBH) , MDC Holdings (NYS: MDC) , and Meritage Homes (NYS: MTH) -- all three of which I've highlighted in my CAPS account as companies I think could benefit from that trend.

What do you think? Share your thoughts below.

At the time this article was published

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