An unlikely name has been popping up lately as a rare bright spot in the nation’s still-abysmal housing market: Detroit.

Among the nation’s top 20 metropolitan regions, only the Detroit and Washington areas posted annual home price increases, according to S&P/Case-Shiller home price data for October released this week. At 2.5 percent, Detroit’s gain was almost double the increase reported for the District, where unemployment and foreclosures have remained relatively low despite the financial crisis.

Improbable as it might seem, the Detroit area is seeing an increase in building permits. Construction firms are dusting off their equipment and returning to work, and bidding wars are breaking out over desirable homes.

“It is a rapid climb back,” said Howard Wial, a fellow for the Metropolitan Policy Program at the Brookings Institution, who with two colleagues published a paper recently about the economic recovery in America’s 100 largest metropolitan areas. “It’s not anywhere near a bounce back, but it’s something.”

Wial’s study listed the Detroit area as one of the 20 strongest-performing regions, along with several others near the Great Lakes, and he said the recent recovery has much to do with the growth in manufacturing and the resurrection of the domestic auto industry.

He said Detroit remains battered by the recession, but it has stabilized more rapidly than many other parts of the country since hitting bottom in 2009.

“Jobs are coming back; obviously not all the jobs that were lost, but there are a lot more jobs now than there were,” Wial said.

The increase in jobs, coupled with fewer foreclosures and fewer residents fleeing the area, has translated into an improved — and in some neighborhoods, even a hot — real estate market.

“This actually has been a record year for us,” said Andy Hargreaves, a Coldwell Banker real estate agent in Plymouth, Mich., who said he has seen sales double in the past year. “The interest in this area is the highest I’ve ever seen it.”

In part, the upturn is attributable to the laws of supply and demand. Parts suppliers to the auto industry and other employers have increased hiring, adding to the number of home buyers, he said. At the same time, although thousands of homes sit empty in the Detroit area, the inventory of move-in-ready homes has dwindled, causing a frenzy whenever one hits the market.

“A home that’s properly priced in move-in-ready condition will, almost in every case, have multiple offers and sell at or over asking price,” Hargreaves said. “Buyers are realizing if you don’t jump on it right away, you get beat out.”

Some businesses have shown a renewed willingness to remain rooted in Detroit. Quicken Loans bought a collection of downtown properties, and businesses, including some that depend on the automakers, have sought out new space.

“What we’re seeing now are companies saying: ‘I’ll sign a five-year lease. I’ll sign a 10-year lease,” said A.J. Weiner, an office broker for the Detroit branch of Jones Lang LaSalle. “That’s becoming more commonplace than the calls I was getting two years ago.”

Despite that encouraging turn, Weiner said Detroit still has plenty of real estate that “time has just forgotten” and has become a smaller market than it used to be.

Others offered similar caveats about the recent run of positive news, noting that Detroit has only begun limping toward recovery.

Detroit area home prices remain 40 percent below peak levels.

In the city, vacant properties make up 23 percent of the total housing stock, according to a recent government study, and the city has about 30,000 vacant homes dotting the landscape. In addition, Detroit’s population fell by a quarter between 2000 and 2010. The city government is on the verge of bankruptcy, in part because of its plummeting tax base and soaring pension costs.

“It’ll never be a full recovery to the size we were 10 years ago, but that’s okay,” Weiner said. ”We just need to stay on solid footing, and that potential really does exist.”