The experts at RealtyTrac told 7 On Your Side that home prices have increased 28 percent in the Bay Area from the time the housing market hit bottom in February 2012. In San Francisco, the prices have risen even more dramatically.

Brian Miller saw first hand how frantic the housing market in San Francisco can be right now.

“I found myself being constantly outbid, putting in offers of 20 percent over asking, getting outbid at 50 percent over asking in cash,” Miller said.

That type of activity didn’t surprise Serena Kokjer Greening of Guarantee Mortgage. She says the small number of homes for sale combined with the improved employment picture is leading to bidding wars.

“You’ll see properties getting six, eight, even 20 offers which, you know, hadn’t happened in four to five years here,” Kokjer Greening said.

All those offers mean rising prices taking us closer to the bubble, the point when homes are considered overpriced.

The Vice President of RealtyTrac Daren Blomquist says we’re still 21 percentage points below the peak of the housing bubble in the Bay Area.

“But then if you focus in on the city, that’s where we’re very close actually to the peak of the housing bubble in San Francisco,” he said.

Blomquist says San Francisco is just 6 percentage points from reaching that bubble stage.

“I think it’s pretty dangerous,” he said.

“Today I received probably my eighth denial of a modification,” San Francisco resident Gale Rosboro said.

Rosboro wrote President Barack Obama and the White House forwarded her case to the Treasury Department to assist her in getting a modification from Wells Fargo. So far, even that hasn’t helped.

“They’ve made no move towards working with me to get a modification,” Rosboro said.

In an email, Wells Fargo told 7 On Your Side, “We have worked with Ms. Rosboro for nearly three years and will continue to try to identify options that are appropriate for her individual financial circumstances. Our foreclosure rate is less than 1 percent.”

Ironically, rising home values could make it even more difficult for struggling homeowners to get modifications.

“I think that people are barely hanging on. There have been a lot of cuts and its been very difficult for families,” Alliance of Californians for Community Empowerment spokesperson Grace Martinez said.

Blomquist predicts another round of foreclosures in San Francisco in the coming months.

“Four of the last five months in San Francisco foreclosure starts have increased from the previous month,” he said.

Blomquist advises home buyers to be patient and not feel you have to buy right now.

Miller waited and found something he could afford. “It feels great, I mean I’m very excited, he said.

RealtyTrac says the next wave of foreclosures in San Francisco won’t be an overwhelming flood, but it does expect an uptick.

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Article source: http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=9196447

(Read More: Homes Selling at Fastest Pace Since Boom)

“It has the look of a runaway housing boom again,” said Jane Fairweather, a Realtor in Maryland, who added that looks can be deceiving. “What you have is very inexpensive money and you have very few houses for sale. As soon as interest rates go up, I think you’ll see a lot of people back off.”

Interest rates have been moving steadily higher. After Wednesday’s speech by Federal Reserve Chairman Ben Bernanke, rates took another jump of 0.375 percentage points.

“It’s an over-correction, but a painful one for buyers,” said Dan Green of Waterstone Mortgage. “A home buyer has five percent less home purchasing power as compared to 24 hours ago.

In the end, sales will come down to buyer confidence, affordability and mortgage rates. Even if that last one moves higher, rates are still historically low and confidence is gaining steam despite the rising prices.

“This week I had a seller who got a full price offer in about four days and he refused to take it because he wanted multiple contracts, come on!” exclaimed Fairweather.

—By CNBC’s Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100761763