I recently read a real estate trade publication where the topic was market value. Many of the real estate agents that responded, said that they were removing appraisal contingencies in their counter offers becasue appraisals were "coming in low", for all kinds of reasons. Many stated that "appraised value, was not market value". Their evidence was multiple offers on a property supporting a value higher than what the property appraised for. Let me say this again, I have yet to see a definition of market value by any reputable institution that does not include "market trend" and "fully informed buyer".  Market trend does not mean ONE HOUSE. A buyer should realize that a list price is controlled by parties that make more money off of a higher price. These are the only people, you, the buyer, comes into contact with  during the purchase process. You typically don't get an unbiased perspective, fully informing you of what similar properties are doing in that neighborhood until after you're in escrow! With todays economy, and real estate crisis, there are many other factors that can make it seem as though demand is greater than supply and it is the beginning of a trend that is here to stay. Let us not forget, we just came out of a huge bubble created by a fictitious market, irresponsible spin and financing!