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5 Key Housing Markets to Watch in 2014

BOSTON (TheStreet) -- U.S. median home values rebounded 6.4% last year as Americans put the long-running housing bust behind them -- and here's a look at five cities where market tracker Zillow expects the good times to roll on in 2014.

"These are all hot areas [for homebuyers] to look at, and we think they have the potential to keep burning into the future," says economist Krishna Rao of Zillow, which recently named 2014's Hottest Housing Markets.

Zillow compiled its list by predicting home-price gains for all U.S. metro areas with 1 million or more residents and combining that with two factors long associated with housing strength: local jobless rates and recent population changes.

Rao says a rising local population creates the need for additional housing, while a good job market gives residents enough money and confidence to buy homes.

"The hottest markets are all characterized by relatively low unemployment and population growth of greater than 3% during the past two years, which will lead to continued heightened demand in these areas," he says.

The economist adds that while the cities atop Zillow's list all enjoyed solid home-price gains last year, he doesn't think buyers have "missed the boat" on getting into housing there.

"I wouldn't say it's too late to buy homes in these areas," Rao says. "I don't think the party's over."

Read on to check out the cities at the top of Zillow's Hottest Housing Markets list. Population-growth figures refer to U.S. Census estimates for 2010-12, the latest period with figures available. Local jobless rates refer to unemployment levels as of September, while projected home-price gains refer to Zillow's prediction of changes to the median value of all residences in a metro area (even those not up for sale).

2014's fifth-hottest housing market: Miami

Miami home values shot up an estimated 17.5%, to $183,400, last year as the metro area continued to rebound from the U.S. housing bust, and Rao expects the market to stay as hot as the Florida sun this year.

After all, the Miami area's population rose 3.6% between 2010 and 2012 -- more than twice the 1.5% U.S. average. The local economy also appears to have turned a corner despite Miami's mediocre 7.3% jobless rate as of September vs. the 7.2% national average that month.

"Miami's relatively high unemployment rate ... hasn't dulled the allure of the beaches and beauties this city has to offer," Rao says. "Population growth is very healthy in the area, which will continue to boost demand for homes that are, in many cases, still priced well below their prior peaks."

All told, Zillow predicts Miami-area home values will rise another 6.3% this year -- well above the 4.8% gain the firm predicts for U.S. housing as a whole.