A summer-long cool-down in the pace of home value appreciation is helping a handful of markets step back from the edge of bubble territory, according to the third quarter Zillow Real Estate Market Reports. The U.S. Zillow Home Value Index stood at $163,000 as of the end of the third quarter, up 6.4% year-over-year and 1.2% from the end of the second quarter, but unchanged from August. The quarterly pace of appreciation was roughly half that experienced in the second quarter.

For months, a handful of already expensive metro areas that experienced relatively modest declines during the crash but very robust gains during the recovery, particularly in California, have flirted with being in a bubble, said Zillow analysts. In order for homes to remain affordable and to avoid a market bubble, the pace of appreciation in these markets needed to slow down or even fall.

As of the end of the third quarter, though, the national pace of monthly home value appreciation has fallen in each of the past three months, and turned negative in San Diego (-1.2%), Los Angeles (-1.1%) and San Francisco (-0.1%) in September, after reaching into the 3% range in all three metros just a few months ago. Among the top 30 largest metro areas covered by Zillow, half showed monthly depreciation at the end of the third quarter. As recently as July, all of the top 30 metro areas showed positive monthly appreciation, with none exhibiting a monthly pace slower than 1% month-over-month.