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The top chart above (click to enlarge) shows the OFHEO House Price Indexes for Nevada, South Dakota, Texas and North Dakota, just recently updated through the third quarter 2008.

The bottom chart above shows the regional OFHEO House Price Indexes for the Pacific Census region (Alaska, California, Hawaii, Oregon, and Washington), the West South Central region (Arkansas, Louisiana, Oklahoma, and Texas), the West North Central region (Iowa, Nebraska, Kansas, North Dakota, Minnesota, South Dakota and Missouri) and the East South Central region (Alabama, Kentucky, Mississippi, and Tennessee).

Bottom Line: The way it gets reported by the media, you would think that the entire country is suffering from the devastating effects of a real estate bubble, when in fact the worst problems are concentrated in a handful of states like California, Nevada, Arizona and Florida. The fifteen states in the three regions representing the entire middle part of the country have not experienced a real estate bubble, and the home price indexes for those regions show a historically consistent pattern of gradual home price increases over time, with a slight leveling off in recent quarters.

Source: No Real Estate Bubble in Central U.S.