The Los Angeles housing market is swinging back into shape after imploding during the financial crash. Homes are selling for more than a million dollars in West L.A. and hitting above the million and a half mark in Beverly Hills.

Recovery is underway even in low-income areas such as South L.A., which was stung particularly hard by predatory loans and foreclosures. Prices have crept up to the pre-bust levels of 2005. And just like 10 years ago, residents today want to become homeowners. But realtors are finding there just aren’t enough homes go around.

“Any home that’s halfway decent is selling,” said realtor Leon Higgins, who’s worked in South L.A. for 15 years. “But you still have more buyers than what’s available to sell.”

On average, he says, three or four people bid on every property. It’s the same rate as 2005, but now there are even fewer homes available.

Where did they all go? When the housing bubble burst, investors and hedge funds began snatching up foreclosed properties and holding onto them as rentals.

“Everybody was running to South L.A.,” said Higgins, going after the bounty of foreclosed properties sold cheap.

Other cities nationwide have experienced a similar phenomenon. In 2011 alone, according to a New Republic article citing Wall Street analyst Graham Fisher & Co., investors made 27 percent of all home purchases. Between the crash and 2014, investors as a group had bought 200,000 homes, according to the Center for American Progress.

One company, Blackstone Group LP, has been especially prolific. It spent $2.7 billion on properties nationwide by 2013, reported Bloomberg.

Certain areas have been particularly targeted. In Oakland, for example, investors bought nearly half the housing inventory.

While no reports have analyzed South L.A., realtors and nonprofits say the area has seen a similar pattern. A report written by several L.A. housing organizations found that Blackstone owns at least 130 properties in South L.A., an area measuring roughly 50 square miles.

“They picked up all the good deals,” said Inglewood-based realtor Frank Oti, referring to Blackstone and similar companies. “They’re probably sitting on them, and waiting for the big price before they can begin to let go.”

Home values, indeed, are going up, even in neighborhoods that still grapple with foreclosures. In the zip code with the city’s highest foreclosure rate – a South L.A. neighborhood – median sales prices have just nudged past their 2005 levels, according to Zillow. (That price is $259,000, compared to $450,000 at the height of the bubble.) RealtyTrac reports that 28 homes are currently for sale in this area, with five times as many in some state of foreclosure.

Some analysts say that investors were partially responsible for pushing up values as they battled against one another to grab discounts. Prospective homeowners, without the deep pockets of investors, were left out of the game – especially here in Los Angeles, the nation’s fourth most expensive housing market. And even with low interest rates, loans these days are hard to come by.

During the height of the bubble, a joke circulated among lenders, said Higgins, the realtor: “They would put a mirror in front of you, and if it fogged up, you had a loan.” These days, just breathing isn’t enough.

“Because of the meltdown and the bank crisis, the pendulum swung way over to the other side,” he said.

Lenders now enforce tough criteria that can foil even well prepared buyers. And banks have grown hesitant to give homes to people only able to afford a down payment of 3, 5 or 10 percent, worried that they’ll simply walk away if they can no longer afford their mortgage. In more affluent areas, buyers tend to put down 30, 40 or 50 percent of a home’s value.

According to Oti, potential buyers need to quality for a traditional 30-year mortgage to get a loan.

“These days, it’s not like you just walk into a bank, and you can just present any data and get approval,” he said. “You have to definitely apply for the loans.”

Some residents are as wary as the banks, noted Beverly Roberts, a South L.A. resident.

She took out an adjustable rate mortgage in 2007, only to see her interest rates skyrocket after five years. She refused to pay for two years, and enlisted a nonprofit to help her get a loan modification. Now she volunteers with that organization, the Alliance for Californians for Community Enterprise, to assist the many South L.A. residents fearful of predatory loans — but still anxious to buy homes.

As Oti noted, many people are willing to see South L.A. continue to recover.

“It’s a neighborhood that has a pride of ownership,” he said.

But John Perfitt, director of Restore Neighborhoods L.A., warned that finding the right price point will be tricky. He doesn’t believe prices should rise past their 2006 levels, calling those figures “untenable” – a sign that “something is awry.”

“Politicians tend to say home ownership is good,” he continued. “But prudent ownership is what we’re striving for.”