Of the 15 highest performing major metro markets, 11 have witnessed yearly home price gains above 20%, with Detroit recording the strongest quarterly growth at 7.8%, the latest Clear Capital Home Data Index revealed. But, there is no risk of a bubble former as prices are way below the peak.

In addition, Detroit posted the second highest yearly home price gain at 31.6% due to its improved REO saturation rate, which is down 34.7 percentage points from its high of 64.6% in 2009.

"While the speed at which some markets are returning to pre-bubble norms is noteworthy, recovery is relative. Detroit is a great example. While it has seen more than 30% growth over the year, the market would need to see another 262% growth to hit peak prices,” said Alex Villacorta, vice president of research and analytics at Clear Capital.

Detroit’s median home price is $120,000, a little over half the national median price of $210,000.  

“In a market with severely depressed prices, bubble-like behavior is unlikely. A sustained recovery will depend on the strength of the local economy,” the report said.

“Unemployment sits at more than 9.0% in Detroit, and median incomes are nearly half of national median incomes,” it added.

As a whole, the nation’s home prices expanded 11.7% over the last year, as the West maintain the regional lead with 19.5% yearly growth.

Meanwhile, lower price tier homes nationally — with values in the 25th percentile of all homes sold — have experienced strong moderation from the last rolling quarter. Current rolling quarterly gains of 2.5% are less than half of the previous rolling quarter.

“While prices across the country saw another boost in October, gains are starting to taper over the last quarter, in what could be the tail end of the summer buying season,” said  Villacorta.

“We continue to see trends in the low tier price sector support a likely moderation ahead. And as we’ve maintained, moderation defines a healthy recovery. While some markets currently have eye-popping growth rates reminiscent of the housing run-up, these trends are mainly short term corrections as markets fall back in line with their long run levels,” he added.