5 Best Housing Markets for 2013

Second-best market: Sacramento, Calif.
Projected median price gain: 11.9%

California's state capital saw median home prices plummet 52.3% during the bust, tumbling from $421,900 in late 2005 to just $201,200 by January 2012.

And while home values have rebounded 12.9% since then to hit a median $225,200, the market is still down nearly 50% from its peak.

Humphries says prices are only back to mid-2002 levels, part of the reason Zillow predicts Sacramento's median home values will add another 11.9% this year.

He adds that California's state government recently reversed years of budget problems and expects a small surplus in 2013 -- good news for Sacramento's housing market.

"Being the state capital probably hasn't been a big factor for the Sacramento real estate in the past couple of years -- but now that they're running a surplus, we'll see if that will help," the economist says.

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