Home sales in most of the country are mired in a market best characterized as sluggish, bordering on comatose. Although there are some positive indicators, like low interest rates and a gradually improving economy, the housing market is still struggling to recover.

Even so, there are occasionally multiple offers even in slow markets. This occurs when a prime listing comes on the market that has features most buyers want; it’s in a good location; it’s in good condition; and it’s priced at or under market price.

If a competitive listing is priced below market value to stimulate activity and a quick sale, paying over the price probably makes sense if you’re not paying over current market value. In some cases, however, a listing in a prime location will attract many offers ending up with a sale price that can’t be justified by recent sale activity in the area.

This happened frequently in 2005 and 2006 when appreciation was running rampant in many areas. Home prices were rising so quickly that recent sales were out of date in terms of price. In most cases today, this is not the case, which raises the question: Are flurries of multiple offers on some properties in some markets creating bubble pricing?

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