While extremes continue in some markets, the national trend in Clear Capital’s July data is moderation as markets at both ends of the spectrum stabilize and return to historic patterns.  Has the New Normal arrived?

Clear Capital reports that national home prices gained 9.3 percent over the last year and 1.6 percent over the last quarter. Yet national home prices remain 33.4 percent below peak values.

Regional yearly gains were led by the West’s 17.8 percent, while the Northeast trailed with 4.8 percent growth. The Midwest and the South continued to closely track, with yearly gains of 7.5 percent and 7.6 percent, respectively.

The top 15 performing metro markets, exhibited impressive yearly gains, with average growth of more than 20.0 percent. 14 metros posted yearly gains above 15.0 percent.

Las Vegas yearly gains grew to 31.2 percent, the first metro to surpass 30.0 percent since the start of the recovery. Quarterly gains of 4.3 percent, the strongest of all the metros, signal this metro could retain its number one spot over the near-term. While Las Vegas leads the recovery, its median price of $145,000 ranks it below 35 of the top 50 markets. This suggests low price points are in part driving Las Vegas’ gains. Conversely, San Jose has seen gains of 26.0 percent over the year, despite its high median price of $710,000, an indication that demand is fueled by a strong local economy. As such, these two markets will likely see a variance in their trends moving forward.

“While July home prices continue to ramp up throughout the country led by Las Vegas posting more than 30.0 percent yearly growth, let’s not forget a healthy recovery means moderation as the new normal takes hold” said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. “Over the last half of 2013, we continue to call for a moderation in home price trends. A rising price floor will dampen some potential homebuyers’ appetites, particularly as recent gains bring many markets back into pre-bubble equilibrium. In other words, homebuyers are starting to adjust to the new normal, where steep discounts from the peak are not as attractive as they once were. Having said that, if housing inventory continues rising, it should help alleviate some of the recent pressure on prices, as well as homebuyer’ confidence in the market’s health overall.

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http://www.realestateeconomywatch.com/2013/08/are-july-prices-signaling-the-new-normal/