Prices are normalizing in formerly "hot" markets, and heating up where markets have fundamental employment drivers.

CoreLogic analyst Molly Boesel looks with an observer's eye at last week's reports on home prices, namely from the S&P/Case Shiller Home Price indices, noting that the big difference between this year and last has to do with which markets are growing faster.

Boesel notes that in the fall of 2014, it was the markets that had been "hit the hardest" by recession in terms of the peak-to-trough pricing level that were setting the pace as the fastest-growing markets. They were starting from very low bases in price, so the percentage change was understandably dramatic. Now, however, there are different markets showing moxie in price increases. Boesel writes of the markets where "fundamentals" vs. "opportunism" seems to be driving the gains:

Home price growth is definitely shifting westward, with San Francisco, Denver and Portland showing the biggest increases in the S&P/Case-Shiller indices for September. San Francisco and Denver came in tied for first, at an 11 percent year over year appreciation, while Portland’s HPI jumped 10 percent. Both Denver and Portland have now made up all of the ground they lost during the crash and are again at their all time price peaks, and San Francisco is right behind them at just one percent below peak.

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