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This Phoenix home, valued at $196,300 with 3 bedrooms, 2 bathrooms and 1,700 square feet, is approximately the average price of a Phoenix home. (Photo: Forbes.com)
The Phoenix-Mesa-Scottsdale housing market may be ahead of most of the nation in its turnaround, at least according to Forbes, which included the area on its recently-compiled "Best Buy Cities: Where to Invest in Housing in 2014" list.

One of 20 metropolitan areas on the list, Phoenix received a positive forecast from investors who used a unique set of metrics to predict market growth.

Forbes joined forces with Local Market Monitor, a home price and economic growth tracker which records data from over 300 housing markets nationwide, to create the list.

Local Market Monitor pulled data for the largest 100 metropolitan statistical areas (a geographical designation used by the U.S. Census) with populations of at least 575,000. From there, the choices were ranked primarily on four factors: population, home prices, and the local jobs economy. Each of our Best Buy Cities have high population and job growth, relatively low home prices, and are still considered under-valued (although in every case except Virginia Beach-Norfolk, Va., home prices have gone up). This makes them fairly low-risk investment opportunities for buyers who are smart and know not to overpay.

One of the metrics used by Forbes and Local Market Monitor has been dubbed "Equilibrium Home Price" -- a value that essentially "tracks what the average price for a market should be, if speculation, weird distortions in local income, and other factors (like the housing collapse) weren't present in the market," according to the article.

The measure presumes that prices will eventually return to this level. When homes are far under the equilibrium price, investors are getting a good buy and can expect to make a good return. The other important consideration for investors is, of course, a healthy local economy. After all, there is zero point in purchasing a home in a market where the population is fleeing. That's why Best Buy Cities are places where opportunities are growing.

The Phoenix-Mesa-Scottsdale area has an actual average home price of $196,035 and an 'Equilibrium Home Price' of $216,373, resulting in a nine-percent difference with a 41-percent three-year growth forecast to boot.

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