Many of us have had a skeptical eye on real estate markets over the last few years. But the new year may bring new possibilities.

Trulia.com recently released its top five markets to watch in the coming year and there might be some surprises.

Topping the list are two cities in Texas, Austin and Houston. Trulia reports that these two markets are seeing steady job growth and a revival in construction which make the markets potentially promising and definitely worth watching in 2012.

According to Trulia's chief economist, Jed Kolko, "Smart cities are hot." What exactly does that mean?

It means that cities that can foster new and stronger job growth will benefit from seeing increased rising home prices in their market which correlates to fewer empty homes creating an overall better real estate market as well as spurring spending in associated home-furnishing industries. It also means that the areas on the top five list share common bonds. For instance, several of them are technology centers. Others are, literally, smart. The education levels are well above the national average.

Coming in at number three on the list is San Jose, California. This may seem quite ironic considering how inflated the housing market was in California–not to mention the ongoing barrage of foreclosures that continue to wreak havoc for many homeowners.

According to Trulia, California's market is as diverse as the United States. So, while prices may steeply decline in one area of California, they may rise in another area. The inland areas experienced tremendous foreclosures but the costal regions were not as affected.

In an article on Trulia.com, the company writes, "San Jose's perennially tight housing market makes it faster to bounce back. The San Jose market –which includes most of Silicon Valley – has rapid job growth and the lowest vacancy rate in the country."

Head to the east coast and you'll find the fourth market to watch next year. Boston, Massachusetts and, in particular, the Cambridge-Newton-Framingham market, which is located west of Boston will likely be positively impacted by a "strong jobs engine". Like most of New England, this market also avoided the worst of the housing crisis.

Why this market? It seems that the Cambridge-Newton-Framingham market along with Worcester (a little further west), and the norther suburbs near Peabody in Boston, offer benefits to homeowners. They're less crowded and expensive and offer exactly what many homeowners are looking for: "more suburban or smaller areas".

Closing out the top five markets to watch next year is Rochester, New York. And, yes, this is surprising. The economy and many big businesses have taken a beating in New York in the past few years. However, the city makes the top five list because Trulia says prices are "stable, and the economy has weathered blow after blow and is expanding".

So, highly educated, tech-savvy cities may steer the way out of the pot-holed and badly marred real estate markets, creating a new road map to a better and brighter housing and job market for 2012... let's hope.

Published: December 30, 2011

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Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website: www.LiveFitMagazine.com. Phoebe's articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today's Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe's writing is also featured in Donald Trump's book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success. Contact Phoebe at (858) 259-3646 or . Visit PhoebeChongchua.com for more information.