10 Housing Markets for the Next Decade

Luke Mullins

Just as the real estate bust slammed different parts of the country with unequal force, each local housing market will emerge from the rubble at its own pace. The recovery in Detroit will look much different from the rebound in Denver.

To get a sense of which markets will see stronger home price appreciation over the next 10 years, U.S. News turned to Moody's Economy.com.

The economics firm sifted through employment and population data and analyzed geographic and industry trends to generate 10-year home price projections for each of the nation's 384 distinct metropolitan statistical areas -- everywhere from Abilene, Texas, to Yuma, Ariz.

Using these data, U.S. News compiled a list of 10 housing markets that should see above-average annual price gains from the second quarter of 2009 to the same period of 2019.

The neighboring cities of Bremerton and Silverdale, Wash., are located on the Kitsap Peninsula, a slip of land surrounded by more than 300 miles of coastline on Puget Sound.

Although the Pacific Northwest greenery is enticing, it's the area's stable economy that should drive home price gains in the coming years. A large military presence -- of the Navy in particular -- helps insulate the local economy from volatility. Moody's Economy.com expects home prices in the Bremerton-Silverdale area to increase by an average of nearly 9 percent annually from the second quarter of 2009 through the same period of 2019.

At the foot of the Adirondack Mountains of New York you'll find Glens Falls. With attractions like Lake George just a short drive away, tourism has long played a key role in the local economy. But the area, which has about 130,000 residents, is also considered "catheter valley" because of its thriving medical device manufacturing industry.

Companies like Covidien, AngioDynamics, and C. R. Bard have outposts in the area, which has become a popular lower-cost alternative to nearby Saratoga County, N.Y., and a bedroom community for the state capital of Albany. Home prices in the area will increase an average of more than 7 percent a year over the next 10 years, Moody's Economy.com projects.

Corvallis, a town of about 48,000 residents, is home to Oregon State University as well as numerous public agencies. About a third of the area's workers are employed by the government, says Mysty Rusk, the president of the Corvallis-Benton Chamber Coalition.

At the same time, the people of this university town have long possessed a creative, entrepreneurial spark. According to Rusk, Corvallis has the highest number of patents per capita in the United States. Large companies like Hewlett-Packard and Samaritan Health Services are among the region's leading private employers. Area home prices should increase an average of more than 5 percent annually over the next 10 years, Moody's Economy.com projects.

Founded in the early 1600s, Santa Fe, N.M., has a mix of history, art, and outdoor wonders that attracts more than 1 million visitors to the city annually. Santa Fe also boasts 300 days of sunshine a year. While tourism helps juice the local economy, the city's favorable employment outlook is linked to its abundance of more stable government jobs. "We are a government town," says Simon Brackley, the president and CEO of the Santa Fe Chamber of Commerce. "We are the state capital, and we also have Los Alamos National Lab 30 miles away, which brings in a lot of federal government money and probably about 12,000 jobs." Moody's Economy.com expects area home prices to increase by an average of more than 5 percent annually over the next 10 years.

With Caterpillar and Archer Daniels Midland serving as its largest employers, Decatur, Ill., considers itself "America's agribusiness center," says Randy Prince, the president of the Greater Decatur Chamber of Commerce. Leveraging its crop-rearing expertise, Decatur hopes to emerge as a key player in the green-energy industry.

Because home prices in Decatur never exploded as they did in other parts of the country, its downturn has been relatively benign. And while the long-term economic outlook is tepid, less aggressive home building should enable real estate prices to increase an average of nearly 5 percent annually over the next 10 years, according to Moody's Economy.com.

Duluth, Minn., has a similar outlook. Although demand will be restrained by weak population growth, affordable prices and manageable supplies should lead to gains of more than 5 percent annually over the next 10 years, Moody's Economy.com projects.

Charleston, S.C.'s charming architecture has helped make this port city on the Atlantic coast a popular tourist destination, attracting more than 5 million visitors a year. "A lot of cities in America would love to have a couple of blocks with historic buildings," says Charles Van Rysselberge, the president and CEO of the Charleston Metro Chamber of Commerce. "In our case, we have miles of those."

A strong military presence brings stability to Charleston's local economy. And Boeing recently announced plans to build a plant in Charleston that will bring in thousands of higher-paying jobs. Home prices in the Charleston area should increase an average of more than 5 percent annually over the next 10 years, Moody's Economy.com projects.

For the past 30 years, Pittsburgh has struggled to transform itself from a rusting steel town to a dynamic center of forward-looking job providers. Its selection as the site of the 2009 Group of 20 summit -- bringing together the world's most powerful economies -- seemed to validate this remarkable turnaround.

With a low cost of living and a strong network of universities, Pittsburgh is home to 1,500 high-tech firms, 500 biotechnology companies, and a robotics cluster, as well as a number of solar and wind energy firms. "You don't have any one sector that is as dominant as it was before," says Dennis Yablonsky, the CEO of the Allegheny Conference on Community Development. Home prices in the Pittsburgh area should increase an average of nearly 5 percent annually over the next 10 years, Moody's Economy.com projects.

Not far from Colorado's breathtaking Rocky Mountain National Park are the neighboring cities of Fort Collins and Loveland. Thanks to university research, local support, and private investment, this area of roughly 300,000 residents is evolving into a leading center for traditional and renewable energy, says Brian Willms, the president and CEO of the Loveland Chamber of Commerce. "We have this fantastic wind corridor to produce wind energy, over 300 days of sunshine a year -- so it's a great place for solar energy -- and we have some of the most productive natural gas reserves in the country," he says. Home prices in the Fort Collins-Loveland area should rise an average of nearly 4 percent annually over the next 10 years, Moody's Economy.com projects.

Although the recent financial turmoil has hurt, Charlotte, N.C., remains the nation's second-leading banking center and home to corporate giant Bank of America, says Bob Morgan, the president of the Charlotte Chamber of Commerce. Charlotte's low-cost, business-friendly climate and diverse economic base should help push home prices higher. Home prices in the Charlotte area should increase an average of more than 3 percent annually over the next 10 years, Moody's Economy.com projects.

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