Home prices are rising faster than incomes in Los Angeles, making it more prone to a new housing bubble than many other major cities, a real estate report indicates.
Rising home prices and strong demand are making the market feel particularly bubbly in Washington, L.A., San Diego and San Francisco, according to the report by online real estate broker Redfin.com.
All of these markets have seen home prices climb significantly compared with income in an atmosphere of low inventory, bidding wars and rapid-fire sales. In Los Angeles, the inventory squeeze has been the biggest factor in driving up prices.
“So many people in L.A. are in between where they bought at huge bubble prices in 2005 and 2006 and now, and they are not willing to list their homes,” Glenn Kelman, chief executive of Redfin, said. “The result is there is a rush on what inventory is out there.”