FORTUNE – "Only a year after the U.S. housing market hit bottom, it may be bubbling up -- again. Odd as it may seem, some economists warn the steady rise in home prices, at least in some markets, are inflated and could eventually pop.527 Ocean Avenue
Indeed, prices across many parts of the country are rising just as rapidly as they did during the bubble years of 2003, 2004, and 2005, but the housing market is still far from bubble territory."
With a steady increase in housing prices lately, I'm constantly asked to answer a question deeply rooted and incited by the 2008 mortgage meltdown: "Are we headed for another bubble?" After attending numerous financial planning, investment strategy, and economic forecasts, I've walked away with more than just a handful of multi-syllabic finance terms and a small forest worth of literature and reading material. My answer may put your qualms at ease: No, not likely.
According to economic forecast predictions as published by UCLA's Anderson School of Management during their last economic forecast in March 2013, Multi Family and Single Family residence prices and sales will continue to increase into 2015. The forecast expectations is to reach a plateau at this time that levels off the steep upswing coupled with increased inventory. Consumers are much more knowledgeable and cautious as to procure a loan with rates that skim usury law violations and buy a house significantly overvalued. The common and widely held misconception that was debunked at a recent REIT conference was that banks were going to begin unloading their foreclosures in huge bursts, akin to a dump truck in metropolis. Contrary to popular belief, banks and lending institutions have actually been steadily releasing inventory. This coupled with population growth spurts have made pre-existing dwellings harder to come by.
In the case of Los Angeles (a very lease driven housing market), rent rates are predicted to rise steadily and surpass relative growth to single family residence sales. As rent prices rise as a result of scarce housing options, it seems quite clear to me that purchasing a home is still the optimal choice. With interest rates still at all-time lows, contemplators should take the plunge and line up the financing- with this being L.A., you'll probably end up landing in a sparkling pool.