(WHAS11) -- Real estate agents are watching to see if an increase in mortgage rates slows down a rapidly growing boom in the housing market. It is one of the quietest and yet most powerful signs of improvements in the economy, and in some places, it can't be missed.
Like the California summer, home prices around Los Angeles are heating up fast. Agent Eric Tan said condos going for $100,000 a year ago, are now fetching $160,000, $170,000 and more.
“The market has changed drastically. Everything is a kind of steady trend upward, in terms of price and also competition for buyers,” Tan said.
Tan works for Redfin, where until fairly recently, the CEO Glenn Kelman was on edge.
“Scared to death was probably how i felt about the market a year ago. We were going on many years since we'd really seen a rally, and now this year, we feel very confident," Kelman said.
Confident because home prices in 20 targeted cities over the past year rose about 12 percent and in some markets by even more.
In Atlanta, prices shot up almost 21 percent; in Las Vegas more than 22 percent; and in San Francisco nearly 24 percent.
The general, slow improvement in the economy and the re-emergence of investors who are convinced home prices have hit bottom, are largely credited with making sellers so happy.
"On the buyer's side, however, it's a completely different story," Tan said.
In fact in some of the hottest markets buyers, who were calling the shots just a few months ago, now find themselves in bidding wars for the most desirable properties. Still, the journey to a full recovery could yet see roadblocks, and it will certainly take time: even with the upward trend the average home value now is about where it was in 2004.
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