Homebuyers have recently been caught off guard by a new development in the real estate market… bidding wars are back this spring sales season.

This recent surge of bidding wars is a result of supply shortages, unlike the wars of the past “go-go years.”

According to the Wall Street Journal’s recent article, the competitive bidding hasn’t been producing huge price increases or leaving sells with large profits. The wars, causes by small inventory, provide the evidence that housing demand is looking up after years of decline.

“An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.

‘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. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.” Read Full Article.