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Is LA experiencing another housing bubble?




First-time home buyers helped fuel housing sales in May to the highest rate in six years.
First-time home buyers helped fuel housing sales in May to the highest rate in six years.
David McNew/Getty Images

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It seems as though home prices are continuing to rise across Los Angeles, with rundown apartments and fixer-upper homes priced in the millions. 

Have home prices reached a tipping point? Or is this just the beginning? William Yu is an economist for the UCLA Anderson Forecast. He says while home values in Los Angeles are high, he does not consider this to be a housing bubble. "Right now we are in a globalized war and Los Angeles is attracting a lot of international wealth," he said. 

Three years out of the recession, Yu says Los Angeles home values are in recovery cycle, which is  attracting many Chinese investors. "Los Angeles is still a bargain compared to the Hong Kong housing market." 

While home buying in LA is becoming tougher for the average middle-class Angeleno, Yu said, its a desirable market for international investors.