Las Vegas is now the nation's hottest housing market, overtaking Seattle, which had held the top spot every month since August 2016.

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For the first time in nearly two years, the Seattle area no longer leads the nation in home price increases.

The monthly Case-Shiller home price index, released Tuesday, showed Las Vegas had overtaken Seattle as the nation’s hottest housing market.

Seattle had topped the country for 21 months in a row, the second-longest streak for any metro area in the closely-watched report’s 31-year history. (Portland had done so for 23 months in the early ’90s).

But the housing market here has cooled way down, with King County prices dropping from their spring highs as inventory has shot up and sales have dropped.

The Case-Shiller numbers don’t reflect the full scope of the slowdown yet: Partially because it includes a three-month moving average through June (things have cooled even more since then), and also because it reflects the entire metro area (Pierce and Snohomish counties haven’t slowed down quite as much as King).

With that said, the metro area registered a 12.8 percent increase in single-family home prices in June compared to a year earlier, down from 13.6 percent growth a month prior. The difference may not sound like a lot, but it was actually the biggest one-month deceleration in home prices in four years.

Las Vegas led with a 13 percent increase, up from 12.6 percent a month prior.

The bulk of the Seattle-area increase was driven by 16 percent growth in the cheapest homes in the region – typically those on the outer edges of the metro area, in places like Tacoma and Everett.

Seattle remains No. 2 nationally. It has actually been in the top two hottest housing markets in the country for 30 consecutive months. (Before Seattle became No. 1. in August 2016, it was second, behind Portland, for about half a year.)

A new analysis from Zillow, using more recent numbers, showed Seattle had the biggest slowdown in housing prices in the country, falling to the 12th-hottest housing market in the nation, among the 35 largest.

The change comes just after Nevada passed Washington on the list of states with the fastest-rising home prices. Washington had led the nation for a year and a half.

What you need to know

So what’s going on in Las Vegas? Sin City was one of the poster children of the housing bust last decade, as the average home there lost more than 60 percent of its peak-bubble value and foreclosures reached six times the national average, according to Zillow.

Now, low inventory and rising home sales have lifted Vegas home prices to about double their low-point in 2012, even though they remain a bit behind their bubble highs from a decade ago.

Las Vegas’ huge fall during the recession also meant the real estate market had a ton of room to go up – and that small increases in home prices would translate to a big gain in percentage terms.

“Population and employment growth often drive homes prices. Las Vegas is among the fastest growing U.S. cities based on both employment and population, with its unemployment rate dropping below the national average in the last year,” David Blitzer, managing director and chairman of the Case-Shiller index committee, said in a statement.

The typical single-family house in Las Vegas now sells for $290,000, just ahead of the U.S. average but far cheaper than Seattle, where the median home costs $805,000.

In June, Fitch Ratings said Vegas was the most over-valued home market in the country, with prices 20 to 24 percent higher than market fundamentals would dictate. Seattle was high on the list, as well, overvalued by 10 to 14 percent.

In recent weeks, the market has indeed started to cool a bit in Vegas, part of a national trend. The Case-Shiller data showed national home prices grew 6.2 percent in June from a year ago, a historically-high amount but still the smallest increase since last November.

Here, the most recent data shows the median single-family house costs $699,000 in King County, $495,000 in Snohomish County and $353,000 in Pierce County. All three counties have seen prices fall since the spring; notably, prices have dropped $25,000 in Seattle and $30,000 on the Eastside compared to the peak levels earlier in the year.

But that’s far too little, too late for many buyers already long-since priced out of the market. The Case-Shiller data shows home values have doubled since bottoming out in 2012, and are up 35 percent over the old bubble peak in 2007. Adjusted for inflation, prices here are up 11 percent over the old bubble high, making Seattle one of the few places in the nation where home prices are at an inflation-adjusted record.