Where housing will bounce back and when

"As investors exit, the market revives," says Mark Zandi, chief economist at West Chester, Pa.-based research firm Moody's Economy.com, as fewer speculative buyers results in a more stable market. "Tampa's a pretty affordable market and first-time buyers can come in once prices fall."

In the market for a seven-figure home? How much domain your dollar will net depends on where you look. Click here to see homes in each state. 

Based on Moody's Economy projections, Tampa should burn off its excess inventory and hit a price trough in the first quarter of 2008, at which point prices are expected to increase by 10.6 percent the following year.

These projections take into account housing affordability, vacancy rates, the strength of the local economy and job market, investor share in 2005 and the share of subprime mortgages. Data comes from Moody's, the Bureau of Labor Statistics and the Federal Reserve's Home Mortgage Disclosure Act.

Predicting the bottom of any asset market, especially real estate, is a difficult thing. While these projections are based on sound data and advanced modeling by Moody's, no one can predict futures markets with absolute certainty.

More from Forbes.com Click links below for slide shows America's most overpriced real estate markets    How much home $1 million buys in the U.S. Most expensive U.S. rentals Real estate tax havens of the world Most expensive states to insure a home

Like Tampa, Phoenix is similarly afflicted by high investor share (26.1 percent) and it has a vacancy rate over 3 percent. Good affordability rates and a surging job market suggest that once Phoenix bottoms out, price growth will be strong. Moody's projection model has Phoenix reaching its price trough in the fourth quarter of 2008 and then growing by 7.7 percent the following year.

Slower recovery rates are expected in markets such as Minneapolis and Boston, where a slumping local economy, slow job growth and negative migration numbers hamper long term prospects. Along with other U-shaped markets like Sacramento, that have double-digit subprime lending share, Zandi says it's going to be harder for these markets to get going again.

Massive manses from coast to coast are commanding record-setting prices. Take a tour of the country's most expensive here. 

That doesn't necessarily mean V-shaped markets are in the clear. The labor markets in cities such as Las Vegas, Phoenix and San Diego, whose future economic success will be critical to recovery, are heavily in housing-related industries, according to Moody's. So long as those economies can weather their respective corrections, they should be all right.

"These markets are going to experience more substantial declines in the coming year," says Zandi. "Gauging the bottom is a very intrepid affair and the job market is very important to recovery."

MORE FROM FORBES

Forbes Section Front

The key to dealing with lousy boss: negotiation IRS rules for medical deductions are sickening Tailgate much? These are the rides you need What automakers have in store for 2010 Top-earning dead celebrity? Not Jackson Need to fire someone? Here’s what to do America’s highest-paid female CEOS Cars with the worst fuel economy Economy is spooking Halloween shoppers The most expensive cities in America Forbes Section Front