The 10 Best Places To Buy A Home This Year

Buying a home right now might seem a little scary, and we're not just talking about the mortgage process.

Though there are scores of what appear to be bargains, how do you know the "bargain" price isn't going to go lower in the months ahead? In fact, the latest report on home values, from S&P Case-Shiller, shows the average home price fell five straight months through November 2010 -- the last month for which there is data.

The key, say housing experts, is to look for stability in a neighborhood or community. That means fewer foreclosures and fewer homes for sale, in general. Jill Simmons, PR Manager for the real estate website Zillow.com, says there are many communities where affordability is at an all-time high, home values are stable and the local economy is strong. 

'Safe' cities

She says that means if you're planning to live in your home at least five to seven years, and have good credit, now can be a great time to buy in these markets. The 10 "safest" cities in which to buy a house, according to Zillow, are:

• Uttica, N.Y.
• Oklahoma City, Okla.
• Rochester, N.Y.
• Pittsburgh, Pa.
• Tulsa, Okla.
• Albany, N.Y.
• Lancaster, Pa.
• Madison, Wis.
• Green Bay, Wis.
• Lincoln, Neb.

What makes these cities safe for a real estate transaction? Zillow looked at four factors:

Affordability

Home prices are measured against the average income. The present affordability rate is then measured against historic affordability for the community. If affordability has improved, that's a plus.

Unemployment

Zillow said it looks at areas with low unemployment as a proxy for the health and stability of the local economy. Unemployment trends over the past year are measured and analyzed. Low unemployment suggests a stable environment, and will make it easier to sell a home in the future.

Foreclosure frequency

By examining foreclosure statistics, Zillow can tell which direction a local real estate market is going. When there is a low rate of foreclosures, it suggests a healthier market. But when foreclosures are rising, it can exert downward pressure on prices.

Price Appreciation

Stability again, is key to the value of a home. It's more attractive for a prospective buyer to buy in a city where the market feels stable and will continue to appreciate. Because so many markets are still declining, ones that have only modest declines in the past year are more attractive than ones with bigger drops because there's lower volatility.