Current Valuation- Legit or Hype

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Is it me or does anyone feels that the current uptick in real estate valuations in certain markets is not legit?? Meaning, the simple rule of supply and demand is not justified correctly? Are we really running out of inventory that causes the value to rise quickly as they are; while our national unemployment is at 7.5%.

I'm no guru or an expert in economics and frankly, I just started investing in this great business, but I do have some reservations on how values are going up when job markets are still in the hole in certain markets. My general understanding of a valuations indeed comes from the basic rule of supply and demand but I also know that housing is married to the job market e.g more jobs more people will buy. Having said that, why are we seeing a decrease in inventory when the jobs are flat or decreasing in some area. My gut tells me the current values in certain markets are inflated unjustly and I won't be surprise when the market might dip again. I hope I am wrong and all this is just my imagination but if it does dip; I just hope is a small dip because I'm investing as well.

My advice - make you stick to your numbers tightly and look at the surrounding of your subject property.

Any thoughts, or is it just my imagination?

Your feedback is much appreciated

Thanks

Darwin