Here in the Chicago area - many of my past home buyer clients during the past four months - got into multiple bid situations.   The reason was that I was monitoring bank owned properties that they were interested in - and the bank got sick of holding the property - and all of a sudden - deep discounted the property.  They wanted it of their books. So - we jumped on it.  In one case - since we were the first one to jump on it - they just accepted our bid.

For example a property that was 220k got discounted to 180k - a 40k drop.  Then - four contracts swarmped in. 

I used my background in corporate competitive intelligence (sophisticated interview techniques)  to find out where the other bidders wer at - and then my buyer client out-bid the highest of the four by $2,000.  The bank took our bid - and we won the property.  The appraislal came in way over what the buyer paid.  As part of the deal - I negotiated in to have all of the buyer's closing costs paid.

Roight now - all my clients are first time home buyer clients.  That is where the market is at the moment.  Very few high-end buyers here in Chicago.  Most of the buying is in the 200's-300's...

In other markets, even with foreclosures still looming, bidding wars are occurring.

In Phoenix for example, a large supply of foreclosed families who can no longer qualify for a loan has spurred investor interest to turn as many of these families as possible into rent-paying tenants in the very homes they used to own.

The bidding war is generally from absentee buyers (investor or vacation properties), which currently represents 4 out of 10 homes sold in the Phoenix metropolitan area as of April. This is about double the level experienced for 2007.

Homes that sold originally for $225,000, now have been sold for $80,000-110,000. Great news for the investor, unless the population contracts.

Similar antidotal data appears to be occurring in the California markets of such as Carlsbad, Oceanside and Vista, but only at much higher prices in the $350,000-400,000 range.