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TheStreet) -- U.S. home prices appear poised to rise 3.3% nationally this year -- but some markets can expect more than twice those gains while others will see property values actually fall, market tracker Zillow.com predicts.
"Real estate has returned to a more-normal condition of lots of small, local markets instead of one big national one," says chief economist Stan Humphries of
Zillow, a website that estimates values for virtually every house and condo in America.
Zillow(Z) released 2013 forecasts this month for 30 major U.S. metro areas, predicting price gains and losses by looking at local market conditions, job growth and other factors.
Humphries says cities with this year's biggest projected gains are generally those that lost the most during the housing bust -- partly because they've got room to rebound, but also because many homeowners there are "underwater." (That's where property owners owe more on their mortgages than their homes are worth, making it virtually impossible in many cases to sell -- boosting prices by reducing the supply of available listings.)
The economist adds that 2013's hottest markets are all in the Southwest, where warm temperatures are attracting retirees, vacation-home buyers and real estate investors who hope to get in on the cheap.
Lastly, Humphries says the cities where Zillow expects prices to rise sharply are all in "non-judicial-foreclosure" states -- areas where laws allow banks to retake distressed homes without lengthy court proceedings.
The expert says lenders in such states have already seized and resold lots of troubled properties, whereas those in "judicial-foreclosure" states still have backlogs of foreclosure cases that threaten to eventually flood markets with bank-owned homes.
"Non-judicial-foreclosure states 'pulled the Band-Aid off' quickly in terms of the foreclosure crisis," Humphries says. "Judicial-foreclosure states are pulling the Band-Aid off slowly -- which is prolonging the housing recession in those markets."
Here's a look at the five cities that Zillow expects will see the biggest percentage gains this year among America's largest metro areas (excluding Houston, which makes too little property information public to allow for analysis). Forecasts refer to median property-value gains for all houses and condos in a given market, whether they're put up for sale in 2013 or not. Estimates of current median values are as Dec. 31, the latest date with figures available.