Las Vegas home prices are on the rise.
They’re up 16 percent compared to last year, and a recent Fitch Ratings report called it the most overvalued housing market in America.
Should we be worried?
Eli Segall covers the real estate market for the Las Vegas Review-Journal. He said he doesn't think there is a reason to be worried about the housing market, but he believes the Las Vegas market fluctuates more than other markets, so people should keep an eye on it.
"There are a lot of factors out here that other cities don't get," he says. It is so transient, you've got so many people that come and go, so that adds a lot of volatility to the market."
Las Vegas also attracts a lot of investors and house flippers, which can add to the volatility. However, because home prices are so high right now, there are fewer investors and flippers than in the past.
Segall said that while housing prices have gone up, they are nowhere near where they were during the height of housing bubble of the 2000s, which is a sign that we are not in another bubble.
Like other cities across the nation, demand for homes in Las Vegas is up, but the inventory of homes is down.
"You've got a real steep shortage of listings on the market and that is pushing prices up because demand is strong right now," he said. "The economy is doing a lot better certainly than it was three or four years ago. There's been job growth, population is growing. So, you do have more demand for housing."
Part of the reason we're seeing a lower supply is the large hedge funds that bought up dozens of homes after the Recession and rented them out. Segall said it doesn't look like those owners are looking to sell anytime soon.
A reason the demand is going up is improving credit. So-called boomerang buyers are returning to the market now, Segall said. Those are the buyers whose credit was hurt by a foreclosure, bankruptcy or short sale. Now that their credit has improved they can buy a home again.
Segall said you'll know the valley is in another housing bubble when homes start going for ridiculous prices.
"When you see homes selling for — a typical two-story 1,700 to 2,000 square-foot house in Summerlin selling for $600,000, which happened a lot ... that's not normal," he said.
Eli Segall, real estate reporter, Las Vegas Review-Journal