Rising home prices worry Phoenix economist

PHOENIX — The Valley’s home market continues to recover from the housing crash five years ago, but a local economist sees some danger signs on the horizon.

Local home prices rose by more than 30 percent last year but economist Jim Rounds with Elliott D. Pollack and Company said if this continued it could lead to another housing bubble.

“I would much rather see a steady increase of 10-12 percent year over year,” Rounds said. “If we’re in that range, we will be OK; if we continue in the 30 percent range we could be in trouble.”

Rounds said there is high chance of another bubble if there is a 30 percent jump in prices in each of the next two years.

“Our economic growth can’t sustain that kind of appreciation.”