kam,

Much depends on where you are getting those estimates. List Prices in today's market don't mean anything more than a starting point. A seller can put whatever price they want on their, but two things need to happen. 1. Buyer needs to make an offer & 2. The appraiser needs to agree with that price otherwise the buyer and seller will need to come to an agreement on the difference between the appraisal and the purchase price.

Appraisers are conservative in many cases and the new HVCC process is killing many escrows.

see: http://homebuysblog.com/2009/06/16/hvcc-impacts-simi-valley-…

Hi Kam,
This is an excellent question. One approach may be that home value estimates are based more on "historical" data, rather than the pulse of the current market. If you've been watching the local real estate market over the past month or two, you'll see "supply and demand" factors driving up values along with buyer incentives such as tax credits and low interest rates. If you've been waiting for the "bottom" of the market, you'll likely find it in your rear view mirror!