Finding reasons for optimism in a floundering housing market is no easy task. Nevada, Florida and California are among the states that have been devastated by foreclosures and tumbling home prices, and even the most elegant neighborhoods haven't been immune.

Foreclosures have hit from the Hamptons to Beverly Hills, and reports that celebrities such as Ed McMahon and boxer Evander Holyfield are in danger of defaulting on multimillion-dollar homes show that even wealthy Americans are vulnerable.

But economists and real-estate agents insist that if you look hard enough, there is indeed some good news. Texas' housing prices, buoyed by the state's thriving energy economy and strong job market forecast, have stayed even or posted gains, and in both the Carolinas and parts of the Rocky Mountain region, prices have been relatively stable compared with the huge declines recorded in many parts of the country. An economic boom in Texas?

What follows is a look at some of the bright spots.

1. Ultraluxury homes

While many luxury markets have seen prices decline in recent months, prices have jumped in parts of Manhattan, San Francisco and Los Angeles. Real-estate agents say the rarefied properties selling for more than $10 million aren't subject to the same realities of the broader markets. Agents also emphasize that all markets include "micromarkets" where home prices and sales remain relatively healthy.

"There's so much variation nationally and regional variation within localities," says Lawrence Yun, the chief economist for the National Association of Realtors. "Texas is doing very well, and in New York certain pockets are doing better than neighborhoods that were exposed to large subprime activity."

Take Manhattan, where co-op and condo markets are king and exposure to subprime loans has been minimal. Unit sales in Manhattan were down 20% through May, compared with the first five months of 2007, according to statistics compiled for New York real-estate firm Brown Harris Stevens. Wall Street layoffs and economic uncertainties have slowed new deals, explains Hall Willkie, the president of the firm. Check out this $64 million home

But ultraluxury homes are another story. Willkie has had several recent co-op sales exceeding $20 million and $30 million at New York's ritziest addresses on Park and Fifth avenues. Brown Harris Stevens recently had a town house for sale on the Upper East Side listing at $64 million.

What's pumping up the market? Willkie says that while foreign buyers remain steady at 10% to 15% of the Manhattan market, the high end is getting a lift from a

recent influx of Russians who have made fortunes in the energy industry and are purchasing large condos as "second, third and fifth homes."

The storied Plaza Hotel, with palatial views of Central Park, has sold 181 condos. Its jewel, a triplex penthouse with 9,200 square feet, sold for $56 million last year. The other hottest address in the Big Apple is 15 Central Park West, an all-limestone edifice designed by renowned architect Robert A.M. Stern and featuring what Willkie calls "over-the-top amenities," including a "beautiful swimming pool that's beyond Olympic." Hedge fund managers and Wall Street titans have been paying up to $50 million for the privilege of residence.

"The ultraluxury buyer is different from most mortals," says William Harrison, the acting director of the South Carolina Center for Real Estate at the University of South Carolina's Moore School of Business. "That buyer is remarkably consistent whether looking for a condominium in San Antonio, Boulder or Portsmouth, N.H. They demand a high level of service solely devoted to their needs."

In San Francisco, luxury-home values gained 2.9% in the first quarter of 2008 from the first quarter of last year, and the Bay Area's average luxury home sold for $3 million, according to the First Republic Bank's Prestige Home Index. Neighborhoods such as Pacific Heights, Russian Hill and the Financial District maintained or gained in value and price per square foot. San Francisco's priciest streets

2. Texas

And then there's Texas, most of which has shown remarkable resilience in retaining its market values.

"Texas has held up because of the energy sector, job creation and retention, and except in some suburban areas, it never had the overbuilding that's led to so many substantial problems in Florida, Arizona and Nevada," says James Gaines, a research economist at the Real Estate Center at Texas A&M University. 4 reasons why Texas is doing well

In Houston's River Oaks neighborhood, a property listed at $16 million was recently sold, although broker Tom Anderson, the executive vice president of Houston firm Martha Turner Properties, wouldn't reveal the actual selling price.

That doesn't mean everything is glowing. Even in River Oaks' exclusive 77019 ZIP code, first-quarter sales were down 18.7% compared with 2007, according to DataQuick Information Systems, a real-estate-data firm. But as in Manhattan, the market is getting a boost from foreign bargain shoppers encouraged by the weak dollar. Anderson says the city is experiencing a wave of buyers from South America and Europe.

Even during the national housing boom, Gaines explains, Texas maintained relatively low home prices. Though cities like Austin, Houston and San Antonio have fared better than many comparable cities, it's the medium-sized cities that Gaines points to as highlights.

The Beaumont-Port Arthur area, about 80 miles east of Houston, is having something of an industrial explosion, to the chagrin of environmentalists. In December, a subsidiary of Royal Dutch Shell joined Saudi Aramco, the national oil company of Saudi Arabia, to begin expansion of a $7 billion oil refinery that will be the largest in the U.S. when it's completed in 2010. (Also on the horizon are an additional $8 billion in energy-related projects, including an ExxonMobil liquefied-gas terminal and an Eastman Chemical coal-gasification plant.)

According to Multiple Listing Service data compiled by the Texas A&M Real Estate Center, Port Arthur's median home sale prices are up 9% at $109,800 this year, compared with the first five months of 2007. Beaumont's prices have remained flat at $126,700 during the same period.

3. Midsize cities

Cities such as Amarillo, Port Arthur and Beaumont are also benefiting from another national trend. Midsize cities -- for instance, Spartanburg or Greenville, S.C. -- have shown modest gains in home values largely because they avoided a huge run-up in prices earlier and didn't overdevelop before the housing bubble burst last year.

Around the country, these smaller cities are reporting home values with modest price gains and minimal drops in sales. William Harrison of the University of South Carolina's real-estate center attributes this not to any profound change in demand but to areas that avoided the housing bubble and have affordable home costs and low unemployment.

Gaines says these cities may also suffer less from high gas prices. Unlike major metropolitan areas, residents of midsize cities tend to live closer to city centers and have shorter commutes.

Home prices in Spartanburg, in northwestern South Carolina, rose 10.1% to $130,000 in the first quarter of 2008; nearby Greenville got a 6% bounce, according to the National Association of Realtors. Harrison says that unlike South Carolina's coastal areas of Myrtle Beach and Hilton Head, there was no overbuilding that left a "big inventory overhang."

Similar patterns have emerged in North Carolina, where cities such as Raleigh, Durham and Charlotte have all shown year-to-year increases in home values. Until recently, it was widely expected that economically diversified Charlotte could defy the housing crisis altogether.

But Charlotte also shows just how shaky the housing situation remains. Although the city had consistently recorded year-to-year home price gains, the city had its first year-to-year home price loss of 0.1% in April. According to the monthly S&P/Case-Schiller survey, home sales are now down more than 20%, and home prices have dropped for three consecutive quarters, according to the Realtors organization.

Harrison points to the implosion in the capital markets for a partial explanation of the downturn: Charlotte is home to Bank of America and Wachovia, both of which have begun massive layoffs.

But more broadly, real-estate experts say, Charlotte shows just how quickly yesterday's bright spot can turn dark.

"Nobody's been totally unscathed," Texas A&M's Gaines says.

Published July 25, 2008