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:


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%
Detroit 3.8% (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 (NYSE: KBH), MDC Holdings (NYSE: MDC), and Meritage Homes (NYSE: 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.