Home Prices Get Rosier —in Certain Zip Codes

The housing market's recovery has become a much patchier affair than the boom and crash were, the Wall Street Journal finds. More areas around the country are seeing home sales and prices rise, but while a few markets are seeing a solid recovery, including Phoenix and Denver, an analysis by real estate firm Zillow finds that it is more common for some neighborhoods to be seeing improvements while others nearby stagnate. "You can actually see the seeds of the recovery starting to spread at the ZIP code level," Zillow's chief economist says.

Buyers are flocking to desirable areas which have become more affordable—seeking a "Tiffany diamond at a discount"—while staying well away from areas with long commutes, poor schools, or higher crime rates, says the chief executive of Redfin, a real estate firm that operates in 18 metro areas. "The marginal neighborhoods won't do well until the so-called desirable neighborhoods are completely fished out," he says. In many of those "marginal" neighborhoods, especially far-flung ones, house prices are continuing to slide downward. (More housing market stories.)