Fear of over-investing in one area

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Last year through personal and retirement funds I bought several properties in the town I grew up in which is in the midwest.  The town is supported by several small businesses and one large business (employing roughly 10% of the town).  The large business is an Automotive plant that has been pretty stable over the last 10+ years.  

Plus side to this town is that nice properties are fairly cheap, renters have been pretty quick to find and profits have been 10%+ on assets invested.  Further I have a trusted family member who is a contractor and is happy to do work for me at very inexpensive levels.  Also, through shear luck, I acquired the perfect Realtor to find properties for me and especially manage those properties.  Right now I'm sitting on a solid block of steady income.  

Down side is the fear that the economy tanks and the Automotive Plant has long term lay offs and the ripple effect hurts the other businesses.  I can handle a short term downside but a long term (10+ years) would be devastating to my retirement.  Is that a realistic fear?  

One other concept might be to invest in HUD homes in that area. I have one already and it is the financial flagship of my small fleet. I would think these would be safe from a short to long term economic storm but are they really?

Insights and opinions welcome.

Thanks.