Washington and Los Angeles are the two markets that
Redfin CEO Glenn Kelman explained, "Too many sales have been all-cash for people to get in over their heads, and sales volume is still nearly 40% below the 2005 peak. But markets like Washington and Los Angeles, where prices have increased more than 25% faster than incomes since 2000, could be vulnerable as interest rates increase over the next year.
“Just in the past few weeks, we've seen buyers using more aggressive loans, appraisals getting looser, and almost every sale turns into a bidding war. Even as the investors who were so active in 2012 start to pull back, others willing to pay more seem to be taking their place."
San Diego and San Francisco are also on Redfin’s vulnerable list. But for most of the country, the factors that create what it termed a true bubble are missing.
It noted home prices are rising, but not faster than buyers’ income, the number of home for sale is at a record low and sales volume is just average.
In the bubble years of 2005 and 2006 there was a high price-to-income ratio; lots of new listings and record high sales volumes all combined with easy credit availability. The four markets cited above
