The sharp increase in home prices — particularly in regional markets such as Phoenix and Las Vegas, which had been so decimated by the bust — is raising concern among some economists.
Indeed, home prices are now posting double-digit gains in some of the places where so-called negative equity is severe. According to data from S&P/Case-Shiller, prices in Las Vegas rose 10.0% over the year and Phoenix was up 22.8%.
It is those kinds of big increases that could fuel speculation.
“It does concern me a bit,” Zillow.com chief economist Stan Humphries said. “It encourages people to think about housing as a short-term investment, instead of a long-term investment.”
The S&P/Case Shiller 20-city index rose 5.5% from the same month a year earlier, up in 19 out of the 20 metro areas tracked. That was a strong increase and a sign that housing will probably continue to rebound this year with supply tight and demand strong.