by Calculated Risk on 4/27/2012 03:03:00 PM

Earlier today from Nick Timiraos at the WSJ: Stunned Home Buyers Find the Bidding Wars Are Back

A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.
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From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today's are a result of supply shortages.
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"We very much believe we've hit bottom," said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago.
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The Wall Street Journal's quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked. ...
Increased competition is frustrating buyers and their agents. "We're writing a record number of offers, but we're not seeing a record number of closings and that's because it's so competitive," said Glenn Kelman, chief executive of real-estate brokerage Redfin Corp. in Seattle with offices in 14 states.

Housing economist Tom Lawler sent me this comment on Timiraos' article:

The above [article] highlights a trend many realtors have been talking about – in many parts of the country homes listed for sale are not just receiving multiple offers, but are selling above list price. In many markets the “catalysts” for this “new” trend are sharply lower inventories of homes listed for sale; moderate increases in “traditional” home buying, spurred by low interest rates, rising rents, and a growing view that home prices may have finally stopped declining; and intense demand by investors for “distressed” properties they plan to rent out. Of course, the article cautions that housing markets face “headwinds” – still high (but much lower) REO inventories, still high (but somewhat lower) numbers of mortgages either seriously delinquent or in foreclosure, still lots of current homeowners “underwater,” and historically “sorta tough” mortgage lending standards. Still, the article is consistent with local realtor reports and other incoming data that home prices in many parts of the country are rebounding, and this trend should be reflected in many widely followed home price indexes a few months from now.