BY MARILYN ALVA, from INVESTOR'S BUSINESS DAILY

Cranes dot the skyline. Going up: luxury condo towers selling for as much as $800 a square foot.

It's not Las Vegas, Phoenix or Miami circa 2005. It's downtown Seattle and nearby downtown Bellevue — in the present day.

Buyers are not speculators, either. Most are people who actually plan to move into the units.

Call it the contrarian market. While most of the country's housing market continues to wither, some areas are still holding up, even seeing double-digit appreciation.

Seattle is one striking example.

"There are definitely pockets in the country that are doing better than others," said Lawrence Yun, senior economist at the National Association of Realtors.

Where are these spots? He cites areas in the Pacific Northwest, the mountain states of Idaho, Utah and New Mexico, and parts of the South, including Texas, Tennessee, Georgia and the Carolinas.

Florida, where speculative buying was rampant, is not on the list. "Struggling markets are the previous highfliers," Yun said.

While most of the 20 top metro markets in the 12 months ending in February saw home prices decline from the year before, Seattle home prices increased the most, by 10.6%, according to the recently released S&P/Case-Shiller housing price index. And they continued to show gains this year, albeit at levels lower than last year.

"Part of the reason is it never went up as much in the boom," said Robert Shiller, chief economist at MacroMarkets and a Yale University professor.

Points North

Seattle stands apart for several reasons. It had an economic downturn early this decade worse than what many other markets saw, and recovery got under way later, in late 2004.

The city's recovery is still at a fairly early stage, says William Riss, chief executive of real estate services firm Coldwell Banker Bain in Seattle. Large employers such as Boeing (BA) and Microsoft (MSFT) are expanding, as are other tech firms.

"Six months ago I would have said we're overbuilding," Riss said. "But the market is strong enough to accept (the new construction)."

California flight also has helped to keep housing prices strong in the Pacific Northwest. "Californians who have sold their expensive homes are not afraid to bid up home prices," Riss said.

Meanwhile, supply of new single-family homes in the Seattle area has been limited due in part to zoning restrictions in outlying areas. That has forced developers to "go up rather than out" in downtown, Riss says.

Single-family homes that do go on the market in Seattle are in high demand. They appreciated about 12% last year. Riss says real estate agents expect a 9% to 12% rise this year.

"This is all about supply and demand," he said.

Sales of single-family homes in the Seattle area would be more brisk if more homes were on the market, Riss says. King County, which includes Seattle, saw home sales dip 13.8% last year vs. 2005. The supply of homes in the county at year-end was a low 2.2 months' worth.

In March, the number of all homes sold in King County fell 1.4% from the prior year. That includes both condos and single-family homes. In Seattle, the number rose nearly 2%.

Supply and demand are well aligned in other still-strong housing markets such as Austin, Texas; Salt Lake City; and Charlotte, N.C. In Austin, sales were up about 6% in March vs. a year ago, as was the median home price, says Socar Chatmon-Thomas, chairman-elect of the Austin Board of Realtors. She's worked as a Realtor in Austin for 13 years. "I'm as busy as I've ever been," Chatmon-Thomas said.

In a twist for an area that prizes land, young professionals and empty nesters are now buying new condos and townhomes. That's driving up their prices about 15% over last year, Chatmon-Thomas says.

Like Seattle, Austin's housing market saw no big double-digit price gains during the boom. "We were just trotting along at 5%, 7% or 8% a year," she said.

Not only is Austin home to the state capitol and government jobs, it's also a university town and has a growing number of high-tech and biomedical offices. Home prices are still relatively affordable, averaging around $178,000.

Salt Lake City also benefits from a growing tech sector and strong job market. "I would not be surprised if it experiences something close to 20% price appreciation in 2007," said Yun.

Charlotte home prices rose 7.3% in February from a year earlier, but most of the jump occurred in the first half of 2006. "Charlotte is an up-and-coming city in the process of being discovered," Shiller said. "There's never been a boom there."

Lack Of Land

A strong local economy with tight supply often means appreciation. Compared with a year earlier, prices in land-tight Los Angeles rose 9% in February and 2.6% in March, says the California Association of Realtors. That's despite sales slowing for months. Compared with a year earlier, sales fell 15.9% in February and 4.6% in March.

Los Angeles' price resiliency contrasts with what's happened in the region's wider-open Inland Empire — Riverside and San Bernardino counties. There the median home price declined 1.7% in March from a year earlier, while sales plummeted 47.6%. Single-family home building in Riverside County peaked in 2004 and 2005, but has since fallen. It is expected to drop further this year.

Prices in the San Francisco Bay area have been relatively stable as the region recovers from the tech bust of 2000 and 2001.

Double-digit jumps are over, but New York housing is holding its own. The job market is strong, especially in the financial sector.

"Wall Street had a good year. That affected the New York City region," said Yun.