Areas like Las Vegas, Phoenix, and Miami — all hit pretty hard by the collapse of the last housing bubble — are now seeing home prices rise at rates above the national average. But rather than this being an indicator that these areas are finally recovering, some worry that it’s just a lot of hot air being pumped into another bubble by Wall Street investors.

The Washington Post reports on the huge amounts of money that institutional investors are putting into single-family homes in some areas hit the hardest in recent years. They are rushing in to buy properties at what is hoped to be well below market rate, with the goal of reselling for a tidy profit as the economy recovers.

According to some in the Florida real estate business, these investors now buy 7-in-10 homes on the market there, and may account for the majority of home sales in other distressed areas over the last two years.

And so, in spite of the lack of probably the most important thing needed for a recovery — jobs — real estate prices in Phoenix have soared 23% in the last year. In Vegas, they are up 15%; 11% in Miami, while the national average is only up 8%. It’s possible that home prices were overly depressed in these cities, and so this is just about playing catch-up, but there are many who see this as false, unsustainable inflation.

“I don’t know whether things are as good as they seem to be,” an owner of a Florida firm that scouts investment properties tells the Post. “The end-user would need to see a great increase in jobs, availability of mortgage money and a loosening of the reins that have been holding them back. But all the economic indicators are that we are not at that point.”

For people currently in their homes but paying more on a mortgage than the home may be worth, this type of real estate speculation can be a boon, as it likely helps to bring the value of that home back up. Of course, this is only sustainable if actual consumers buy houses at these higher prices. If investors fail to see returns on their purchases, the prices will go down as they rush to get out of the market and recover their investment.

Making bubble worries worse are concerns that investors, who can pay cash for homes, are boxing out consumers who simply want to buy a home but must go through the often lengthy financing process, meaning they can not take advantage of the historically low interest rates.

“The investors are making it hard for a regular homeowner to buy a property,” explains a real estate broker in Fort Lauderdale, who says that 17 of his last 20 sales have been to investors. “They are getting outbid by people with cash.”

A number of investors are not looking at these properties as things to flip once the price hits a certain level, but as sources of lucrative rental income for years to come.

One firm tells the Post it bought most of its houses in the Ft. Lauderdale area for between $60,000 and $70,000. Meanwhile, it charges rents in the range of $1,700/month, several times what a homeowner would pay each month in mortgage.

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