The Wall Street Journal is reporting that buyers are finding more competition than they expected for homes they like and, in some cases, bidding wars. The unanticipated level of competition for homes results from more buyers entering the market, historically low interest rates, more investors in the market buying up distressed properties in cash deals, and an artificial decline in inventory due to would-be sellers who want to sell but won't because they owe more on their property than it is worth.
I also believe that buyers have come to accept the state of the real estate market and are no longer as scared as they were a few years ago. They don't find the process of buying a foreclosed home or a short sale nearly as intimidating as it was a few years ago. This is our new reality and people are adjusting their behavior and expectations accordingly.
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