Vegas is like that too. It sucks for many here because Vegas is mostly a blue collar town. They can't afford a home so they rent a two bedroom apartment and move in a family of 5 or more.
I think the market is going to adjust...it has to. Prices are out of control. We bought a house in Wisconsin three years ago and sold it a few months ago for $5k over our asking price. We made out like bandits after only 3 years. Did I mention it was on the market for 1 day? And it was around the holidays too! In a cold climate!
Now we are in Vegas and are locked into a rental home in Green Valley/Henderson until January of next year. I'm thinking of renting instead of buying here. Craftsmanship is garbage, houses are close together, etc. I'm taking a "wait and see" approach. We're not blue collar though, so we have that advantage. We don't have to move a family of 4 into a 1 bedroom apt. (thank God).