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When housing began to simmer back in 2002, prices were rising around seven percent a year, then eight percent in 2004 and a stunning 12 percent in 2005.

At the time, words like "bubble," and "unsustainable," were uttered with every monthly reading. No one had seen home prices soar like that since the mid 1970's.

Historically, prices nationally rise about three to four percent a year. The market was clearly too hot, and by 2007 it had reversed dramatically, with prices falling nationally for the first time in history.

Fast forward to today and the housing recovery.

Barely a year in, home prices rose over eight percent annually in December, according to a new report from CoreLogic. While still down double digits from their 2006 peak, prices are suddenly soaring again and raising some serious red flags.

Analysts at Clear Capital, which runs a four-month moving average price index, note that January's numbers show, "momentum stalls." While they blame this on seasonal slowdowns, they point to Florida as a concern.

"Florida metros, namely Miami, Orlando, Tampa, and Jacksonville, were all missing from the top 15 performing market list. Since September 2011, at least one of these markets made the list," cautions Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital. "While this isn't confirmation that the recovery is finished in the sunshine state, it's certainly something to keep an eye on. These markets led the recovery in late 2011, and share some of the hallmarks for recovering markets overall."

Florida's housing market has been driven by distressed homes, and investors buying them at a rapid pace.

Other markets that saw the most distress during the housing crash, like Phoenix, Las Vegas, and much of California, have also seen so much investor demand, that prices are up by double digits from a year ago.

Phoenix leads the pack, with prices up 26 percent from a year ago, according to Clear Capital. The "REO saturation" there, that is the share of sales that are foreclosures (Real Estate Owned) is 17 percent. Mind you, that is down from over 50 percent just a few years ago, when the market was still crashing. The story is the same in Las Vegas, where REO saturation is still 38 percent, and prices are up over 15 percent annually. Investors have cleaned out the inventory so much that they are now bidding up prices higher than any expectations, and that is pushing many potential owner-occupant buyers out, especially first-time home buyers.

In Florida, where there is a huge pipeline of distressed loans, foreclosures had been severely delayed due to the so-called "robo-signing" foreclosure processing scandal. After years of negotiations and now final bank settlements, foreclosures are moving again. This increased inventory may be what is slowing the big price gains.

More concerning is that the investor price drives are not playing out in other parts of the country, specifically in the South and Midwest.

In St. Louis, Chicago, Charlotte and Dallas, distressed properties are making up about one third of the market, often higher than markets out West, but home prices are either flat or down annually, a far cry from the jumps out West. That is because investors are not as interested in these markets. As banks now begin to ramp up foreclosures, not just in Florida, but especially in states like New York and New Jersey where judges had been holding up the process as well, more distressed inventory will come on the market with fewer potential buyers. That will push prices there down.

Essentially, the recovery is becoming increasingly bifurcated, with much of the nation still suffering as some markets see bubble price dynamics.

Most of the investors in those bubble markets are big money, hedge funds. They have claimed that they are in the market to hold and reap rental rewards, but as prices jump, they may be inclined to take their profits now.

What we had thought were safer, long term buys, may now turn into the flips of the last decade. The question will be if there are enough non-investor buyers out there to support those sales?

True, consumer confidence in housing is returning. Improving employment is making home buying an option again. Price gains have brought many potential buyers out from underwater on their mortgages, allowing them to move again. Of course they would have to list their homes first, adding to inventory.

You can see where the dynamics become so complicated that it is easy to have huge housing optimism among the many warnings. Inventories are very low right now, and that is driving prices. Most predict prices will continue to rise through 2013, but prices always lag sales, and these prices are reflecting the sales of last year, the investor sales. If sales do not continue to be strong, and lately they have not been, then prices could easily turn in the hot markets and worsen in the still struggling markets.

AHT/ARA