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The Portland housing market is hot, but last month it nearly ran a temperature.

“I’ve never seen so much cash,” said Marge Bare, a broker for the Meadows Group Inc. Realtors. “Most of the offers are cash. You might as well forget (Federal Housing Association loans) in the inner city. Conventional (loans) – you can kind of be competitive, but there is so much cash out there, it’s winning the day … Last month, it almost got to a fever pitch. You were doing between 10 and 20 offers per home within a day of being listed, and this is up to $600,000 and $700,000 at least.”

With home inventory in the Portland-metro area becoming increasingly tight, prices are rising and competition among prospective buyers is stiffening. The situation is keeping Realtors busy, but also triggering a resurgence of cautionary buying practices last seen before the recession.

Prices for homes in the Portland-Vancouver-Hillsboro market (including distressed ones) have increased 15.4 percent from 12 months before, according to CoreLogic’s home price index for March. Nationwide, home prices increased 10.5 percent year over year for the largest such increase since March 2006. It was the 13th consecutive month of price appreciation.

Bare said some local buyers – motivated by the fear of losing an offer to a competitor – are offering $50,000 to $75,000 over asking prices. Consequently, sellers are requiring buyers with conventional loans to agree to pay out of pocket for any amount over the home’s appraised value (typically banks will finance a mortgage only up to the amount of the appraised value).

The increased competition, Bare said, has reintroduced a potentially troublesome tool – escalation clauses. Essentially, the clauses automatically ramp up offers to meet any following bids, and then add a small amount more to remain at the top. Those haven’t been present in the real estate market since the housing bubble, she said.

“People are paying way more than houses are worth,” Bare said. “That’s not what we want to see … So there were a lot of concerns last month by Realtors, and a lot of discussion about it. That’s one of the reasons we wanted more listings.”

Fortunately, Bare said, the news about the market favoring sellers appears to be reaching the ears of homeowners who have been waiting on the sidelines; more homes are being listed. To this point, the market has been a playground for investors with large amounts of cash, but Bare said she’s beginning to see that taper off as prices rise (and as the margin between purchase price and rental revenue decreases). Lately, she’s seen an entirely different buyer-type.

“The cash that I’m seeing is from parents buying houses for kids,” she said. “Last week, I sold a house in Vancouver (Wash.) to a gentleman in Hawaii, who paid cash for his son … I guess the millionaires next door are all around.”