At a time when most Americans still see their home values sinking, vacation home rental company HomeAway, based in Austin, Texas, is seeing its valuation rising.

The company, which filed papers to go public in March, initially hoped to raise $230 million, but has upped its share price to between $24 to $27, which would bring in $248 million—and value the firm at $2 billion.

"The home rental market is booming right now," says Portfolio.com's travel guru Joe Brancatelli. "Unless you're going somewhere for one or two nights, or can't live without room service or a concierge, you've got to be crazy to stay in a hotel. If you're visiting somewhere for a week, you want to stay in an apartment."

But investors who may be tempted to call the vacation rental industry yet another fresh bubble—rival and startup Airbnb, which signed Ashton Kutcher as not only an angel but also a strategic adviser, is staying mum on whisper valuations of $1 billion—need to look at the numbers available. HomeAway reports that it made $167.9 million in 2010 in its SEC filing, and cites a Radius Global Market Research study commissioned by the company that found the vacation rental industry generated $85 billion in 2010 in the United States and Europe, but that property owners had a tough time reaching and marketing to a global audience.

HomeAway says its online marketing strategy captures that key market attributing to 39.6 percent year-over-year revenue growth. The company is also cash-flow positive—a key element in this current economic climate. Cash-on-hand is $51.5 million, a year-over-year increase of 59.1 percent.

To sustain this growth, it had more than 500,000 paid listings (homeowners pay about $300 per year to list their property) as of December 2010, is available in 120 countries, and has enlisted the help of 250 people to manage property owners, deal with travelers, and provide customer service. The company raised $504 million in funding from companies like Google Ventures, American Capital, Trident Capital, Institutional Venture Partners, Austin Ventures, and Redpoint Partners.

Those differentiators, and the fact that the company has been in business since 2005, all work in HomeAway’s favor as it gears up to test investor’s taste for the public rental market. But plenty of questions remain, especially in a field where much of the trust is built on the property owners’ reputation, where getting answers from those owners can be difficult ahead of bookings, and where accusations fly of shark maneuvers to get listings. Add to that the skeptics who wonder whether business travelers will even consider using services like this one or trendier upstart Airbnb’s, or will they resort to using listings on Craigslist, the marketplace that arguably gave birth to these more specialized groups.

The company can’t comment on any of those questions because it is in the quiet period ahead of its IPO, and analysts are keeping mum as well, especially since three banks—Goldman Sachs, JPMorgan Chase, and Deutsche Bank—are underwriting the offering. But as Paul Graham of the Y Combinator incubator told a panel at TechCrunch Disrupt NYC, “I definitely worry about the prices, and I’m telling people to go out and get their funding now because the money’s out there, but tomorrow we can wake up…and the money would disappear.”

As to whether the company, Airbnb, or any of its other copycat competitors both at home and abroad are worth the billions of dollars that they may soon command, Brancatelli says the answer to that is definitely, maybe. "

I don’t know what anything’s worth. Market valuations and market capitalization is bizarre. Market valuation rarely has anything to do with fundamental worth. These services are changing the way that people are vacationing and that's got to be worth something."

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