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According to the report, housing markets with the biggest booms in 2004 and 2005 are generally expected to be the slowest to return to normal levels of activity and those that showed more restraint will be the first to show growth & mdash; with notable exceptions concentrated in the industrial Midwest. In addition to the state-by-state analysis, the report examines data for seven major Census regions and divisions. Highlights include:
The South Atlantic Division: This part of the country had widely varied housing experiences, with areas like Georgia as well as Asheville, Charlotte, Durham, Greensboro, Raleigh and Winston-Salem metro areas in North Carolina all experienced only modest declines in 2006, leaving the areas near or above pre-boom levels of production. In contrast, many markets in Florida experienced some of the highest levels of overheating with markets like Orlando seeing housing starts spike to 150 percent of normal.  ;
West South Central Division: Dominated by Texas, which accounts for roughly 75 percent of its housing starts, the West South Central division had the strongest growth during the boom and has maintained the highest level of production through the correction. The division also includes the New Orleans metro area which has seen its pace of housing starts emerge from its 2005 collapse to rival pre-Katrina levels.
East South Central Division: The East South Central division& mdash; comprised of Alabama, Kentucky, Mississippi and Tennessee& mdash; was the only area other than the West South Central division to have housing production levels at the end of 2006 above pre-boom levels.
Mountain Division: The Phoenix metro area rose to 149 percent of pre-boom demand in 2005 before dropping to 79 percent by the end of 2006, making it one of the most volatile markets in the nation. Las Vegas performed similarly with prices rising rapidly, primarily due to investor demand. NAHB forecasts that due to the steep corrections, these areas will grow moderately this year and next as they cope with the prices, production and investor excesses that swamped them.
Pacific Division: The boom in California, which accounts for 70 percent of the starts in the division, had something to do with investors but more to do with demand for affordable housing in the state. The report notes that major markets such as Los Angeles, San Diego and San Francisco are expected to experience strong gains