The market is, as a general rule, driven by demand. The only time I can think of when demand was not the driving force was when it was influenced by lenders who stopped foreclosing and selling their REO property. By keeping so many homes off the market they cornered the market and kept values higher than they should have been.
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These being said, as Realtors we provide our buyers with comparable sold homes data before making an offer for a certain property and we also analyze all the sold inventory with the home sellers before listing a property. The offers and negotiation process is based on these data and more importantly, on the ability and willingness to pay and respectively accept a certain price and terms for a property. Of course, sometimes, the offering prices clash with the appraised values, but that is another subject.
Alina Aeby-Broker Associate
Pacific Union International