Skimming the office copy of the Wall Street Journal yesterday, I was surprised to see on Page 1 an article titled “Stunned Home Buyers Find the Bidding Wars are Back”.

The article said that many buyers are now competing for the same house – but unlike the “go-go years…today’s bidding wars are a result of supply shortages”.

In closing two escrows this month representing buyers of homes in the entry level price point range for single family homes, both parties had to fight to get their home – in both cases offering more than the listed price.

The scenario often goes like this:

After a period of looking to gain a good understanding of value, a buyer will make their first offer. It will generally be under the asking price (plus asking for seller concessions) because the lender or short sale seller “needs to get rid of it” or “it isn’t worth any more than that”.

A week or so later, after hearing their bid wasn’t accepted, we start the process again of looking at new listings, and a new offer is made. This time, we’re more attuned to the other buyers and the offer might be closer to the asking price (and not so much in seller concessions) and maybe again our offer isn’t accepted.

It’s a highly emotional, frustrating experience, but now it’s “game on”. More looking, and finally this time there’s a highly tuned understanding of where the market place is at that moment in time and what it takes to close the deal.

Don and I counsel our buyers upfront about what they may face, but unless you’ve gone through that process, it’s hard to understand how frustrating and emotional it can be.

Many economists believe this lack of inventory and this competition among buyers is signalling that the “housing crisis” is about over. Rents have been rising, spurring more buyers into the market. But with patience,  buyers today are still finding “great deals” out there.

Here’s a link to the article…