Home prices took a nosedive during the Great Recession that started in 2008. Prices fell in all local markets, but much more in some than others. And afterwards some had a better recovery than others. Job growth is part of the story, but not a very useful one because nobody can predict which markets will have more jobs in the future. Furthermore, how come San Francisco and Denver had the same job loss in the recession, but home prices fell 20 percent in the former and only 5 percent in the latter? Something else is at work here and we can capture it by comparing real home prices with the "income" price -- the price that balances with local income. It is what we at Local Market Monitor call the Equilibrium Home Price. The income price has been a very successful forecasting tool for decades -- not just in this recession. When markets are overpriced or underpriced, home prices always return to the income price. We can use this to our advantage in 2017 because some investment strategies have a better chance for success in markets that are overpriced and underpriced. In short, look for underpriced markets where prices are in fact rising again, and make sure the rise in prices is linked to better job growth.