Las Vegas stands out as one of the hottest markets in America with home prices up 15 percent year-over-year.
"More traditional buyers and sellers are sitting out of the market and investors are bidding up prices for foreclosed homes and [homes] at the lower end of the market," Quinn Eddins at RadarLogic tells Business Insider.
Eddins says investor activity in Las Vegas has increased 67 percent year-over-year through December 2012.
All of this has some economists warn that it may be overheating.
"Phoenix and Las Vegas were cities that had not been very bubbly, but then they joined this bubble around 2004 and then they became wild and they became very speculative and then they crashed over 50%," Robert Shiller said in an interview with CNBC.
"Now they're starting to come up with some exuberance I have to say. Those are the most dramatic places."