In Florida, where the court system is clogged with home seizure cases, 18 percent of houses with a mortgage are in the foreclosure pipeline, compared with 20 percent in 2009, the Mortgage Bankers Association reported. In other states that require judicial review, such as New Jersey and New York, the number of homes in the pipeline increased.
"If the foreclosure process has moved efficiently so that whatever problem there was has been taken care of, you're going to see price appreciation as long as employment is growing," Fannie Mae's Duncan said in an interview.
For the most part, sellers are marketing their properties because of life changes, including taking a new job, getting a divorce or having their grown children move out, Khater said.
A four-bedroom home on 1.3 acres (0.53 hectare) in the Detroit suburb of Bloomfield Hills, Michigan, went on the market in October, when the owners decided to "downsize," said Barbara Nigro, who has lived in the house since 1976.
"Now it's time for another family to move in and raise their children there," she said in a telephone interview from Scottsdale, Arizona, where she and her husband own a winter home.
The Nigros dropped their asking price by $150,000 to $950,000 in January, according to the listing. An offer is pending.
"Maybe if I kept it for two more years I'd make more money," said Michael Nigro, 71, a retired pediatric neurologist. "I don't have the patience for that. I don't want the responsibility."
Lori Bakken, the agent who represents the Hensleys, said three of four bids she submits on behalf of buyers face competition. She said she expects the dearth of supply to be temporary.
"As word gets out there that there is a lack of inventory, I believe sellers will seize on that opportunity," Bakken said.
The Hensleys haven't given up on living in the Renton, Washington, area, where both sets of parents live. The winning bidder offered $15,000 above the asking price and didn't make the sale contingent on successful financing or inspection, according to Kimberly Hobbs, the Seattle broker who represented the seller.