The Zillow Real Estate Market Report used the most recent quarterly figures to illustrate the slowdown; quarter over quarter appreciation in the first quarter was 0.5 percent compared to 2.1 percent in the fourth quarter of 2012. Zillow calls the recent months of robust price gains “unsustainable” as historic annual home appreciation has run around 3 percent.

Some local markets however show no signs of slowing down. Five of the metropolitan areas covered by Zillow experienced year-over-year appreciation exceeding 20 percent. These are largely areas that were particularly hard hit by price declines and/or foreclosures during and after the great recession, but their recoveries are still notable. The annual increase in Phoenix is 24 percent, Las Vegas 22.3 percent, San Jose 22.1 percent, San Francisco 21.4 percent, and Sacramento 20.1 percent.

The recovery, however is uneven. Seven of the top 30 metro markets declined in the first quarter. Chicago leads this group with a first quarter decline of 1.4 percent from a flat fourth quarter. St. Louis was down 1.2 percent, Charlotte 0.7 percent and Philadelphia 0.6 percent. New York saw a decline of 0.3 percent after three positive quarters. Cincinnati and Pittsburg had smaller losses.

Looking ahead, the Zillow Home Value Forecast shows national home values increasing by 3.2 percent through March 2014, an annual appreciation rate more in line with historic norms.

“The national housing market has rebounded strongly over the past year. But the sometimes dramatic home value run-ups experienced during these months were never expected to be sustainable, and recent slowdowns are indicative of a market that is slowly finding its natural level,” said Zillow Chief Economist Dr. Stan Humphries. “Looking forward, we expect annual home value appreciation to continue to slow, as more inventory comes up for sale. But pockets of very rapid appreciation will remain, a troubling sign of volatility and a potential future headache as affordability is compromised and homes begin to look much more expensive to average buyers. This affordability issue may become acute in many markets in a couple years once mortgage rates begin to return again to normal levels.”