Housing market heats up: home prices increase


"Interest rates are still at historic lows, according to everyone out there, so I would say yes, if you can afford to buy and you're comfortable, buying right now would be great, as long as you plan on living in the house for seven to 10 years," said Morgus.

Trailing only Nevada, California is second in the nation in home price increases over the last year, up 20.2 percent since May 2012, followed by Arizona, Hawaii and Oregon.

The owners of one Echo Park home bought it for $650,000 in 2008. Now, they are getting offers higher than the list price of $749,000, but just a few years ago, they would have lost money on it.

Sandy Papazian is looking for a home for her son before interest rates climb higher. Already, it's gone up a full point in just the last month.

"We figure that if we do buy high and it does dip within the next year, we can always refinance," said Papazian.

Real estate agent Patricia Ruben agrees that even though the market is only getting better for sellers, it's also a buyer's market.

"It's funny, 50 percent of them are on the move to get something before it goes up, and 50 percent of them are scared," said Ruben.

Nationally, prices are still 20 percent below what they were in 2006, but have grown for the 15th straight month in a row.

So what's next on the real estate horizon?

"That's the tricky question. Even the smartest economists in the world are having trouble predicting what's really going to happen with the real estate market," said agent Matthew Morgus.

For now, the flurry continues as home prices skyrocket and interest rates climb.

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