Despite an undeniable slowdown, the real estate market is far from dead.

Economists say decent price appreciation is still possible in several of the nation's real estate markets, particularly in the Pacific Northwest and parts of Texas.

"The days of whopping 30% or 50% price gains are over," says Tom Stevens, president of the National Association of Realtors. But Stevens says 6% to 8% price appreciation will happen in several markets over the next year, and "that's still a phenomenal return."

Though there's seemingly ominous data from realtors and a rash of

warnings from homebuilders about a lack of demand for new homes, overall home prices haven't shown major year-over-year declines. On Tuesday, the NAR said existing-home sales dropped 6.6% to an annualized rate of 6.67 million units in May from 7.14 million a year earlier. Still, the average median existing-home price jumped 6% from a year earlier to $230,000.

The average single-family home price will rise 3.5% between now and June 2007, says David Stiff, an economist with Fiserv Lending Solutions, which he says is still a decent gain.

Data released this week from PMI Mortgage Insurance, a unit of

PMI Group

(PMI)

, showed somewhat of an increased risk of a drop in home prices. According to PMI's U.S. Market Risk Index, there's a 29% chance that home prices will decline over the next two years in the largest metropolitan areas -- up from a 22% chance a year ago.

But the index also showed that slowing price appreciation is balanced by underlying economic strength, said Mark Milner, PMI Mortgage Insurance's chief risk officer, in a statement. "In the absence of an unexpected economic shock, this makes a gradual cooling of the market the most likely outcome," Milner said.

"We'd reached a point where prices had gotten too far away from economic fundamentals," he added. "A return to a more normalized appreciation climate is a natural outcome."

And even though appreciation is slowing in a number of former hot spots, PMI found that half of these large metropolitan regions will maintain double-digit appreciation rates over the next two years.

What's Hot? What's Not?

The areas showing strong price appreciation right now are in parts of the country where home prices are relatively affordable compared to nearby areas and where job growth is robust, says Lawrence Yun, senior forecast economist at the NAR.

"These markets didn't move that much in the last two years of the boom, but now they are ripe for some catch-up opportunities," he says.

Fiserv's Stiff agrees that the areas that will post strong price appreciation are places that didn't become overvalued during the boom and that have strong local economies.

"The area that is really the strongest is the Pacific Northwest," says Stiff. "It was never caught up in the wave of extreme home price appreciation that happened during the latest boom, and it has strong income and employment growth."

A forecast released by Fiserv and Moody's Economy.com that covers home prices through the first quarter of 2006 predicts that several areas in Washington state will see some of the best price gains in the country.

Moreover, Yun says Portland, Ore., is seeing its housing market warm up, in part because prices in the city are very affordable relative to those in Northern California, and the area's job growth is strong.

On the East Coast, Yun says Richmond, Va., and Virginia Beach, Va., will benefit as people in the Washington D.C. region decide to cash in on big gains in that hot market to buy a larger home further south at a lower price.

"Baby boomers are buying their second homes now and plan to someday make them primary homes when they retire," Yun says. "Boomer buying patterns will keep a bust from happening in housing and will help shift hot spots to different parts of the country."

In Florida, which was home to several of the hottest markets of the housing boom, the best price gains are moving north along the peninsula as people steer clear of expensive locales like Miami.

"Miami was extremely hot, and the market excitement moved to Orlando and Central Florida," says Yun. "Now we're seeing stronger action in Jacksonville and Gainesville. Retirees who planned on Miami realize how expensive it is and start to look at alternatives in the state."

He also notes that property insurance costs and insurers pulling out of hurricane-prone areas like Florida are skewing prices, as homebuyers are having a difficult time getting insurance pull out of deals.

Fiserv and Economy.com's forecast predicts that price appreciation will hold steady in Houston, Dallas and the Carolinas, where the job market is coming around strongly and prices are affordable. Yun says there could still be some strong price movements in parts of Ohio, Georgia, Utah and New Mexico.

Where has the hot money gone cold?

Yun says that price growth will be significantly lower in places like Detroit, Cleveland and Akron, Ohio. He adds that the same will happen in the Lake Erie area and Buffalo, N.Y., because these areas have experienced devastating job losses.

And Coldwell Banker realtors from around the country said in interviews with

TheStreet.com

that almost any market that was burning up just a few years ago will soften in the months ahead.

For the next four quarters, Fiserv and Economy.com project price declines of 0.4% in the D.C. metro area, vs. a 20.6% gain in the previous four quarters. Other flagship names in the boom that will see price depreciation include Las Vegas, San Diego and the New York City metro area, according to the forecast.

Though growth is slowing in these major metro areas, prices are still among the nation's highest.

"Jobs are still being created in these places, so if there is any dip in prices, there will always be buyers there to pick up the deal," says Yun. "Housing is a long-term decision for most people ... so if there is an opportunity in these expensive areas, it's an opportunity to make a move."