Part of the reason housing prices have taken off? Investors. Some from other countries, some from Wall Street. They've snapped up homes at bargain prices, then rented them out.  Investor interest sparked bidding wars in housing markets, which Anthony Sanders saw first-hand when he bid on a house in the Virginia suburbs of Washington several years ago.

“I just happened to have one Chinese investor literally arrive at the house at the same time I did," he says. "And we almost had a foot race to the door. Fortunately, I’m faster.”

Sanders knows a thing or two about the housing market. He teaches real-estate finance at George Mason University, and says the bidding wars are producing bubbles in the hottest housing markets, like Los Angeles, San Diego and Charlotte.