According to Barbara Corcoran on Today’s Show, 5 markets have higheer potential to rebound in housing market due to strong first time buyers, good weather, growth in population, job growth potential,  employment rate, cities do not have over-built, well educated population and high foreclosure rate early.
http://www.msnbc.msn.com/id/21134540/vp/30825142#30825142

5 Markets with High Potential to Rebound

1. Denver, CO

2. Raleigh, NC

3. Austin, TX

4. Seattle, WA

5. San Francisco, CA

3 Challenging Markets

1. Fort Myers, FL

2. Saginaw, MI

3. Akron, OH