The Bubble Takes Shape

Here in Los Angeles, wannabe homeowners tell tales of being shut out of the market because they can’t make all cash offers (nationally, just under one third of homes sold for all cash in June), or afford to give up mortgage contingencies.

Carrie Kangro, a producer and mother of two toddlers, tells me she’s lost out on several Venice and Santa Monica area homes over the past year, including one where the realtor or owner would not even allow her husband to view the property until she had put in an offer. Another — the most recent house she was not able to purchase, listed at $879,000 and ultimately sold to someone who offered $935,000.

Compounding the frenzy: many of these eager homeowners are not individuals at all, but investors. Some, especially in areas like the lower middle class inland empire areas like Riverside County, are Wall Street firms like the Blackstone Group entering the landlord business.

Billfold pal Helaine Olen traveled to Los Angeles to witness the beginnings of what looks like our next housing bubble, which seems inevitable given our tendency to relive history. The bidding wars, which are happening all over the country, reminded me of Rebecca’s account of trying to buy a house in Oakland. Real estate madness — it’s back.

Photo: IK’s World Trip

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