We are revisiting the Case-Shiller index which serves as a barometer of private real estate activity. The statistic, measuring real property values identifies the year 2000 as a baseline. All 20 component markets of the composite began with a value of 100 in the year 2000. We shall list the figures, in descending order:

1. Washington, D.C. - 195.49
2. New York - 192.92
3. Los Angeles - 192.55
4. Miami - 186.84
5. Seattle - 176.51
6. Tampa - 175.07
7. Portland - 174.21
8. San Diego - 172.20
9. Boston - 162.58
10. San Francisco - 156.88
11. Las Vegas - 154.15
12. Chicago - 149.60
13. Phoenix - 149.09
14. Minneapolis - 143.43
15. Charlotte - 133.20
16. Denver - 132.67
17. Atlanta - 125.23
18. Dallas - 123.16
19. Cleveland - 109.35
20. Detroit - 93.21

Although 8 years of data is a limited amount of information; we may still recognize particular patterns from the statistics. All of the top listings feature natural, geographical boundaries restricting the amount of land available for construction purposes. Glamour markets also retain a monopoly over a particular industry.

Our nation's capitol presides upon a hill overlooking a dredged swamp and a small district of acreage - separated from Virginia by the Potomac and traversed by the Anacostia River. Cultural and financial capital, New York City is an amalgamation of 5 boroughs - divided and contained by waterways. Whereas Los Angeles, mecca of all things entertainment, is hemmed in by shifting plate tectonics and the San Gabriel Mountains.

Sprawling cities cannot match the long term price appreciation of these areas. Developers are free to build in all directions, and pricing activity will be contained. Of course, limited price appreciation also limits the probability of any outright bust. Dallas, Atlanta, and Charlotte are typical Southern population centers characterized by low population densities and sprawling radial build outs, courtesy of the sheer abundance of suitable land in the region.

Although Denver is referred to as 'The Mile High City,' the metropolitan area is actually quite flat. Denver is the Western terminus of the Great Plains and growth is not constricting by geographical barriers.

I deem Southern and interior West real estate to be conservative, long term investments. I-95, California, and Florida population centers offer the prospect of greater returns in compensation for higher levels of risk. All are suitable areas for property investment, according to one's tolerance for risk.

This is basic economics: supply and demand encountering risk versus return.

The Rust Belt is a disaster. Sans Minneapolis-St. Paul and Chicago, I would not advise aggressive real estate speculation within this decaying industrial zone at any cost. Detroit, Michigan is the lone market where the real estate price level has in fact lessened since 2000. Cleveland, OH has not fared much better. Cleveland carries a July 2008 score of 109.35 - a miserable return of approximately 1% per annum.

The Rust Belt, identified as the American manufacturing belt from Buffalo to Duluth, MN has been decimated by overseas competition and the misfortunes of our Big Three automakers. The economic prospects of the area remain bleak, at best.