Our buyers are making a competitive bid in some cases $40,000 over asking price only to be blown out of the water by a competing bid with an all cash offer. Apparently there are buyers and investors with access to large quantities of cash.

My suggestion to any buyer would be to be persistent and vigilant when looking for a home. Rumor has it that by the middle of the year we should experience a flood of bank owned properties (REO) in these affordable areas and as such may end up either stabilizing the need for affordable homes or continue to impact the values in these affordable areas.

One last thought is that there will be a deliberate low ball listing price to generate the multiple offer frenzy we experienced in 2005 at the height of the market. This is a listing technique that is frowned upon by the real estate community but ultimately difficult to control let alone police.