It seems strange that no matter how bad the market condition is, the local housing boom seems to go up and up. Economists who predict any downward trend are proven wrong time and time again. How can it be? Something seems to be wrong with the law of supply and demand. Perhaps the clue to this is misleading data intentionally fabricated in order to feed a real estate bubble.
This is what happened in the US and I wonder if it might also be happening here. The National Association of Realtors in the US publishes data on home sales which most people refer to. It is found that it has been regularly misreporting the housing sales figures, being overly rosy so as to encourage people to keep on buying. The overstatements appear to have widened since 2006. That was when the first signs of trouble in the housing market appeared. Recently NAR reported homes sales in 2010 was 4.9 million, when CoreLogic (a real estate analytic firm) says it was 3.3 million. In another example, NAR's chief economists told people in 2007 that the market had bottomed out when it was still falling.
The story on NAR was reported in the TIME magazine yesterday. See: http://curiouscapitalist.blogs.time.com/2011/02/22/did-realtors-inflate-home-sales-by-1-6-million-in-2010/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+The+Curious+Capitalist%29
My say: Real numbers or fake, we will all be victims of the people who manipulate information. The market will continue to behave in the way the data (real or fictitious) tells us to. Unless the unscrupulous parties are brought to task, they will continue to do what they are doing, which is to stoke the real estate fire for as long as they can, so that they can continue to reap the fat commissions and fees from selling real estate. Real estate prices will never come down by virtue of supply and demand. It will only fall when the economy crashes due to other reasons.