Multiple offers are returning to many housing markets as banks create buying frenzies by releasing their real estate owned foreclosures for sale to the market at low prices.

According to agents and brokers, banks are deliberately listing their repo properties under value to create competition among buyers, get multiple offers and increase the sales price.

In many markets across the country where there are a lot of short sales and foreclosures in the past several months, homebuyers and investors have been competing to get the best deals.

In Seattle, homes listed at $300,000 get a lot of offers and are often sold in its first weekend of listing. Based on data from the National Association of Realtors, the median price for an existing single family home in the area covered by Tacoma, Seattle and Bellevue in the second quarter has fallen by 13.7 percent from the second quarter of 2008.

Also, according to a home price index, home prices in the Seattle metro area have dropped by around 20 percent from their peak level in 2007.

These price declines have created a frenzy of home buying, shrinking inventories of homes for sale and increasing pending home sales in the Puget Sound region in July by 21 percent from July 2008, according to a regional multiple listing service.

Housing market analysts said multiple offers are rising in markets that suffered sharp home declines but are still viewed by many as desirable markets.

In Cape Cod, Massachusetts, area brokers have observed that oftentimes multiple offers arise because banks have been slow in responding to purchase offers. They also said that foreclosure homes priced under $200,000 get the most number of offers.

In the past months in Chicago, real estate businessman Paul Gorney has observed that homes priced below $400,000 are getting multiple offers. He has interpreted this increase as an increase in demand for beginner homes. Even short sales, according to him, have been getting a lot of offers as soon as they are listed.

In Montclair, New Jersey, brokers said sellers routinely list their homes at low prices, hoping that their low initial asking price will create a frenzy of offers and will drive up the sales price.

Housing analysts however point to areas battered by foreclosures, such as Fort Myers in Florida, as having the sharpest rises in multiple offers. Bank owned homes oftentimes receive over 30 offers with prices about 150 percent above the asking price.