Falling prices don't always equal a good buy, but neighborhoods where prices are low relative to rents and demographic factors are more likely to take off. With help from brokers and Andrew Schiller at NeighborhoodScout.com, we looked at four hard-hit cities.

30-month price drop: 19 percent
Median home price: $108,000
Foreclosure rate*: 5 percent

Atlanta's foreclosure rate is up 37 percent over last year. But investors are flocking to the southeast burbs, where prices have fallen by half, says Re/Max agent David Schenck. Exhibit A: eastern stretches of Decatur, where a $35,000 three-bedroom ranch home can rent for $800 a month. (Schiller likes a pricier area surrounding Washington Memorial Gardens cemetery.) A riskier option is Atlanta's historic West End, a gentrifying area where prices have fallen 75 percent after a spate of mortgage fraud.

Forecast: Decline is slowing.

*Annualized

SOURCES: REALTYTRAC; LOCAL MARKET MONITOR; NEIGHBORHOODSCOUT; S&P/CASE-SHILLER HOME INDEX

30-month price drop: 49 percent
Median home price: $114,000
Foreclosure rate*: 9 percent

Phoenix is the ninth-heaviest foreclosure market in the nation, and the situation is the most dire far from the city center, where investors are gobbling up small homes in pop-up towns like Queen Creek and Maricopa City. A $100,000 three-bedroom home will fetch $900 in rent, leaving you $200 to $300 profit after mortgage payments, says agent Jim Ortman. But the first areas to regain their value may be more established, closer-to-downtown communities with strong schools, like Scottsdale and Chandler.

Forecast: Prices still diving.

*Annualized

SOURCES: REALTYTRAC; LOCAL MARKET MONITOR; NEIGHBORHOODSCOUT; S&P/CASE-SHILLER HOME INDEX

30-month price drop: 48 percent
Median home price: $133,000
Foreclosure rate*: 11.5 percent

Orlando has twice as many foreclosures this spring than last, according to research firm RealtyTrac; the short-term outlook is grim. Still, Schiller sees promise in student-heavy subdivisions near the intersection of expressways 417 and 408. Investors, meanwhile, like the Metro West section, where two-bedroom condos that sold for $200,000 at the market's peak are selling for less than $50,000 but fetch rents of $900 to $1,200 a month. Just watch out for rising homeowners-association fees, says Century 21 agent Vincent Paige.

Forecast: Near-term looks bleak.

*Annualized

SOURCES: REALTYTRAC; LOCAL MARKET MONITOR; NEIGHBORHOODSCOUT; S&P/CASE-SHILLER HOME INDEX

30-month price drop: 18 percent
Median home price: $100,000
Foreclosure rate*: 3 percent

Cleveland never enjoyed the housing boom, so the price slide has been gentle. You can buy a house in the city for $5,000, but broker David Barr says the better bet might be in upscale suburbs Shaker Heights or Lakewood, where a multifamily home could bring in $2,000 a month in rent. Shaker Heights is cheaper, with homes in the more modest sections selling for less than $60,000, but the town requires investors to put 1.5 times expected renovation costs in escrow; Lakewood owners don't face that requirement.

Forecast: Relatively stable.

*Annualized

SOURCES: REALTYTRAC; LOCAL MARKET MONITOR; NEIGHBORHOODSCOUT; S&P/CASE-SHILLER HOME INDEX