Newton, MASS Homes for Sale, Newton, MA. Realtors This confirms what I have been preaching all along, Newton, Brookline, Cambridge have not suffered severely during the housing debacle because we have a more educated and diversified population. Trulia’s Chief Economist, Jed Kolko: “Smart cities are hot.” Here are 5 real estate markets that Jed says you should definitely keep your eye on in 2012. “In 2012, the local housing markets that will enjoy rising prices, new construction or both, are those that start the year with stronger job growth and fewer empty homes holding back the market. Based on these factors, along with other leading indicators, here are my top five cities to watch: 1. and 2. Austin, TX, and Houston, TX. The bloom’s not off the yellow rose of Texas. Steady job growth and a construction revival make Austin and Houston two of my five cities to watch. Texas isn’t hung over from the housing boom like the other big states of the South and West, so there’s little to hold back growth. Honorable mention to Fort Worth and San Antonio. 3. San Jose, CA. Wasn’t California at the center of the foreclosure crisis? Didn’t prices there fall more than everywhere else in the country? Yup. But there’s no such thing as the California housing market: California is almost as diverse as the U.S. Even though prices plummeted and foreclosures skyrocketed in inland California, the coast is another world. San Jose’s perennially tight housing market makes it faster to bounce back. The San Jose market –which includes most of Silicon Valley – has rapid job growth and the lowest vacancy rate in the country. 4. Suburbs of Boston, MA. This Cambridge-Newton-Framingham market just west of Boston has a strong jobs engine and, like most of New England, missed the worst of the housing bubble. Honorable mention goes to Worcester, one step further west, and Boston’s northern suburbs around Peabody. These areas all benefit from offering more bang for the buck than crowded, expensive Boston: this is because most people looking to move are searching in more suburban or smaller areas than where they live now. 5. Rochester, NY. That’s my hometown, and knowing what’s happened to Kodak and other pillars of the local economy, I was surprised when Rochester scored on the top 5 list. (I applied the same formula to all cities and did not have my thumb on the scale.) Prices – which fell little during the boom – are stable, and the economy has weathered blow after blow and is expanding. What do these markets have in common? Three – Austin, San Jose, and the area west of Boston – are technology centers. In those three metros, as well as in Rochester, a center of high-skill manufacturing industries, education levels are well above the national average. As the recovery proceeds, smart cities are leading the way. During the housing boom, the go-go cities tended to be lower-skill, lower-education metros. But in 2012, smart is hot: it’ll be the revenge of the nerds.” Believe it or not, Jed was just getting started! He’s also compiled a list of 2012 Real Estate Market predictions that goes way beyond which markets are hot, which you can read in full, here.