U.S. News turned to Moody's Economy.com. The economics firm provided average and quarterly price-to-income data for each of the nation's 384 distinct metropolitan statistical areas. By comparing the most recent figures with longer-term averages, they were able to compile a list of 10 cities for real estate steals.
1. Memphis: Higher pushed the price-to-income ratio in Memphis to nearly 5 in the first quarter of 2006--sharply above its 2.13 average for the 15 years ending in 2003.
2. Salinas, Calif.: homes in Salinas are expected to become even cheaper this year as foreclosures exert additional downward pressure on prices
3. Medford, Ore.: Because its timber industry is crucial to the local economy--wood-processing jobs represent at least a quarter of all manufacturing positions--the collapse of the new-home building market triggered higher unemployment in the area.
4. Washington: the price-to-income ratio of the Washington area fell to 1.12 through the third quarter of 2009.
5. Mobile, Ala.:\ home prices in Mobile, Ala., have dropped about 7 percent in recent years.
6. , N.M.: The housing market in Las Cruces, N.M., has become increasingly undervalued in recent years when compared with historical averages.
7. Fayetteville, N.C.: The housing market in the military town of , N.C., avoided wild price swings that devastated other parts of the country. Rather than surging, home prices remained largely flat for most of the previous decade. Today, house prices in Fayetteville remain undervalued when compared with longer-term averages.
8. Phoenix: After jumping more than 85 percent from 2002 to 2006, home prices in the Phoenix area have crashed by 52 percent in recent years.
: In recent years, home prices in the and Arlington, Texas, area have also grown increasingly undervalued when compared with longer-term averages. The area's price-to-income ratio fell from 3.95 in the fourth quarter of 2005 to 1.89 through the third quarter of 2009.
10. Cincinnati: Home prices in Cincinnati have remained relatively affordable throughout the nation's recent boom-and-bust cycle.