A home price index for South Florida rose 10.5 percent in August, the largest annual gain among 20 metro areas nationwide.
The Standard & Poor's/Case-Shiller index continues to show softening of home prices in Palm Beach, Broward and Miami-Dade counties, though the tri-county region still saw enough of a jump to outpace the rest of the nation for the first time since June 2002.
Some analysts consider Case-Shiller to be the best measure of home prices because it tracks the price of the same house over time. Local Realtor boards release a median price for homes sold in a given month.
But the index lags local Realtor board numbers and does not include condominiums.
The September median price for single-family homes in Palm Beach County was $269,200, down 2 percent from a year earlier, the Realtors Association of the Palm Beaches said last week. Broward's median of $270,000 was unchanged from a year ago, according to the Greater Fort Lauderdale Realtors.
Market followers say the leveling off of home prices will help prevent another housing bubble.
"Continued labor market gains, low interest rates and slower increases in home prices should support further improvements in housing," David M. Blitzer, chairman of the index committee at Standard & Poor's, said Tuesday in a statement.
Prices have cooled across the country, particularly in Phoenix, Las Vegas and San Francisco, the Case-Shiller data show. South Florida prices are still down 33 percent since peaking in December 2006, according to the index.
Jim Flood, regional manager for Supreme Lending in Palm Beach and Broward counties, said mortgage applications remain steady, though buyers continue to struggle to find suitable homes for sale.
Flood is encouraged by still-low mortgage rates, which hover near 4 percent. He said he's not predicting they'll drop much further, "but I didn't think gas would go as low as it did, either."