After soaring fast and crashing hard, Las Vegas home values are recovering at one of the fastest rates nationally.
But this market isn't alone: Several other cities that experienced housing bubbles and economic destruction when the bubble burst are also leading the pack in real estate recovery.
In Sacramento, home values climbed 34 percent over the past year, the fastest rate among major metropolitan areas, according to housing data firm Zillow. Las Vegas came in second at 33 percent, followed by Riverside, Calif., at 32 percent.
Nationally, home values climbed just 6 percent during the same period.
The rapid growth is due to strong demand for a limited supply of homes for sale, Zillow Senior Economist Svenja Gudell said. Wealthy investors swooped in during the recession to buy cheap houses to turn into rentals.
Housing supply also is limited by cities’ legions of upside down borrowers. Drowning in mortgage debt, owners can sell their homes only with bank approval, an often-grueling process.
As of June 30, 48 percent of borrowers in Las Vegas were underwater, the highest rate in the country, according to Zillow. Other cities above the 24 percent national average included Riverside (36 percent) and Sacramento (32 percent).
Growth in home values is expected to slow nationally, including in Las Vegas, as some investors, facing high prices they helped create, pare down on purchases. But for now, property values are skyrocketing in formerly hard-hit cities.
“I still have to do a double take,” Gudell said.
Produced by: Kyle B. Hansen. Source: Zillow.