For one -- the price of a home is simply a reflection of what someone is willing to pay for it.
Just because you don't think that a home is worth something doesn't mean someone else doesn't think it is worth that.
My investor clients picked up a ranch in Livonia for $53k in November 2011. We closed on it last Friday for $129k. When we listed the home, the first offer we got was for $100k, saying the market was overvalued and this is what the home should be worth. We rejected their offer and the following day, had 5 offers and took the highest offer of $129k. The people who bought the home loved it, said it was perfect for them and met all of their needs.
So, what we're experiencing now is this:
Supply and demand problem. Our 12 month inventory is down 18.6% from March 2012 to 2011.
In that same period, the average price went up 18.7%.
9 consecutive months of sales increases.
Say what you want about the market, but if you want to play, you'll have to play -- or don't buy. Any skilled agent will work diligently to help you ascertain these figures to allow you to come to your own conclusion, but in all reality, who owned the home, how long they owned it for, what it last sold for and such have relatively low impact on the pricing in most cases.
In addition, Fannie Mae only has 3% down loans on homes owned by Fannie Mae, which is because they know the appraised value of their assets. Freddie Mac does not offer a mortgage program -- they only back loans.
FHA has a precaution in place on the "flip" market as you mentioned in requiring two appraisals on a property if the resale value is over 100% of the prior sales price. So, your points are valid but the system is set up to accommodate and validate these items.