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"Unless prices went down, I don't think we would have ever been able to afford a home," said John Henschel, 37, an information technology consultant who will move with his family into a five-bedroom house in Wheaton, Ill., in May. "But we feel like prices aren't going to go back down. We're confident. So why not?" When the landlord on their Chicago apartment told them he was selling it, Henschel and his wife decided it was time to buy. The home they bought for nearly $450,000 could have fetched more than $570,000 six years ago, according to housing website Zillow.com. On a rainy Saturday this month in long-struggling Riverside, Calif., 12 families visited a three-bedroom house priced at $199,999. Ten others stopped by in the first hour of the next day's open house. By the end of the weekend, two buyers had made offers. "We're seeing more buyer activity this spring than we've seen in probably four years," said Liane Thomas, the broker who was showing the house.
Prices in the area could rise in coming months because the supply of homes for sale in Riverside is down
-- from nearly 19,000 last year to 13,000 in February. Many potential buyers are hunting for deals in places that were especially hurt by the housing bust. In Sarasota, Fla., which boasts wide sugar-sand beaches, condos are selling for an average of $325,000, compared with more than $550,000 at the height of the boom, said Marc Rasmussen, a broker. Homes nearing foreclosure account for nearly half of all properties on the market, according to the Campbell/Inside Mortgage Finance HousingPulse survey. That compares with 10 percent in healthy economies. Many are receiving multiple offers because their prices have plunged. In Phoenix, a foreclosed home offered for $77,000 that had been vandalized received 21 offers last month at or near the asking price
-- roughly the price it sold for. The average time a home sits on the market in Phoenix has dropped from 114 days last year to 90 days, according to the Cromford Report, a data research group. In suburban Washington, D.C., Rory Obletz and his wife have been saving to buy after renting for six years. Obletz, 27, failed in two previous bids for single-family homes. He's hoping a third bid
-- about $10,000 above the asking price of $399,000 for a home in Silver Spring, Md.
-- will succeed this month. "One home we went to, it was under contract by the time we walked out of the house," Obletz said. "If you really want to get something, you don't have a lot of time to think about it." It isn't just bargain-hunting families seeking homes. Investors are increasingly buying single-family houses, fixing them up and re-selling them or converting them into rentals. Investors are out-bidding many first-time buyers on cheaper homes in particular. Sales of homes between $100,000 and $250,000 have jumped nearly 19 percent over the past year. For homes between $250,000 and $500,000, sales are up 13 percent. More expensive homes, from $500,000 to $750,000, whose sales tend to contribute the most to the U.S. economy, are up a smaller 6.7 percent. For buyers seeking to move up to a bigger home or to relocate, the toughest challenge is often selling the home they're in. According to CoreLogic, about 11 million homeowners are "underwater"
-- they owe more on their mortgage than their home is worth. Yet for first-timers like Obletz, who have been saving and watching as homes have become more affordable, the time feels right. "Rent is a little more expensive, and we have the money, so we might as well jump on it," he says.
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