Here are 10 cities were real estate values are bouncing back.
Seventeen metro areas in the much-watched S&P/Case-Shiller Home Price Indexes saw price increases from July to August, according to Standard & Poor's.
Home prices in both the 10-city and 20-city composite indexes and all metro areas except for Cleveland either improved or fell more slowly. Charlotte, N.C., Cleveland and Las Vegas were the only metro areas to see monthly price declines. The 10-city index fell 10.6%, the 20-city index 11.3% from 2008 levels. It capped off about seven months of home prices, beginning in early 2009.
The numbers may not sound great, but they're a great relief from the plummeting prices of 2007.
"Broadly speaking, the rate of annual decline in home price values continues to improve," David M. Blitzer, chairman of the Index Committee at Standard & Poor's told the press on Tuesday. "While many of the markets remain down versus this time last year, the relative rate of decline has shown some real improvement. California, in particular, has seen some real positive prints in recent months."
Economists credit lower home prices and low interest rates with drawing buyers into the market. Lenders say the first-time home-buyers' tax credit, a credit of up to $8,000, has helped.
- Minneapolis, Minn.
Minneapolis home prices improved 3.2%, more than any other metro area in the index. Manufacturers, such as 3M ( MMM - news - people ), and high-tech industries are hoping to benefit from the coming recovery. Minneapolis-based U.S. Bancorp ( USB - news - people ) is among the healthiest U.S. financial services companies, according to Moody's.
San Francisco home prices increased 2.8% from July to August this year. Home prices there will drop 8.3% by next June, but will increase 14.3% by 2011. After the area works though its supply of foreclosures, it will be prepared to recover, according to First American Core Logic.
Detroit home prices, which rose 1.9% over the month, may have nowhere to go but up. Home prices fell 22.6% since last year, and are at about 72% of what they were in 2000. It remains the only metro area in the country where home prices are below the 2000 level.
Chicago, Ill.
Chicago home prices rose 1.7%, following a 2.7% increase from June to July. Mike Onorato, president of the Illinois Association of Realtors, credits the first-time home-buyer tax credit for motivating buyers and building momentum for a recovery.
For the remaining top ten click her Forbes Magazine
The Bottom Line
Despite improvement nearly across the board, it's unclear if the real estate recovery will gain momentum. While some economists believe home prices have hit bottom and are improving, others say price increases are not sustainable because of continuing high unemployment and the demise of the first-time buyer's tax credit, scheduled to end this year. Both factors, Blitzer said, may have a dampening effect on home prices.
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