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In the last few years, I have bought and sold homes in various locations accross the country including Las Vegas, Phoenix (Arizona) and Sacromento (NorCal). I have gained and recently lost portion of my investments and learnt a few lessons now with this.

a. Real-estate areas with strong fundamentals will not depreciate - see below for more on this.

b. Those with newer community and newer malls will lose steam very soon as potential for new expasion is high - supply is high, demand is less.

c. Areas with 'favorable weather conditions' are likely to appreciate better than those without - however, last year was a odd year to discuss specific areas of odd weather conditions.

What are the strong fundamentals of real-estate?

1. Favorable Weather
2. Low Crime and well educated residents
3. Good public schools
4. Well developed and an existing cities - about 50 years old with limited space to expand.

With all of these, no matter what happens to the market - oil prices, treasury bond, mortgage interests; Potential to appreciate rather than deprecate are higher.

Lets take an example of the local cities: Milpitas, NorCal is a great city which satisfies the above fundamentals excepting #2 and #4. Here the supply-and-demand cycle is favoring new home buyers with lots of potential to expand into neighboring cities and hence, the real-estate in this area is tending to stay flat or depreciate.

Another example on the extreme is Saratoga - it satisfies all the above fundamentals - 1 through 4 and is now currently selling homes with multiple offers and price-war.

If you observe those cities that are failing to sustain the appreciation including Las Vegas, they do not satisfy either #2 or #4 above. For those contemplating to own homes in these areas, it might be a good idea to rent out single family homes than own them at this time.

I strongly believe, no matter which market you are in - Bulls or Bear, the likelihood of your returns would strongly depend on the above fundamentals - maybe more - please feel free to comment on them.