You can simply spend $350,000 in a better area that didn't see foreclosures or that has seen long term stability (older established neighborhood). You may not find a home with the amount of space you need though.
I'd even say that newer neighborhoods developed right now in a place like Dallas-Ft Worth in that price range will be okay. The problem is that a new neighborhood full of $350,000 homes may see foreclosures if the economy falters next year and the owners can't find buyers....or you may see a an apartment complex or neighborhood of small $150,000 homes developed nearby if the market softens. If the economy does well for the next 10 years the area will have time to establish itself.
There's always one or two suburbs in a metro region that keeps other parts of town honest. Even Detroit metro has neighborhoods like that. There's always the one area that sees the fewest foreclosures, the fewest active listings, and the highest/sq ft average costs. Pick that area to reduce your risk. It's more than likely an older neighborhood in the city or an inner ring suburb near the major employment centers.
In Memphis, it's the part of the city between Poplar and Walnut Grove and the Germantown and Collierville area. No idea what an equivalent area would be in Dallas (maybe University Park or something? I don't know the area well enough).
Avoid recently gentrified areas or new developments on the outer fringes of the city as a general rule of thumb for reducing the risk of experiencing what you did.
What part of Dallas are you in? The city has done well economically even during the recession though I know there is some large scale housing developments there. I can't imagine your neighborhood issues being as common there as Atlanta.
Houston has plenty of "disposable" neighborhoods like this. I'm worried my brother may live in one (Fall Creek) but his area seems to be okay for now. I think if he sold today he would do fine but I wouldn't be shocked if some of his neighbors were upside down. I wish he'd consider selling. At least half of the newer development around that area is rental. Not looking good.
This post was edited on 8/5 at 1:29 pm