'Overvalued' or rather 'overpriced'? Real estate just as any other market instrument can be objectively overpriced. Asking price is often set higher to pad fo

'Overvalued' or rather 'overpriced'? Real estate just as any other market instrument can be objectively overpriced. Asking price is often set higher to pad for negotiation, as giving a discount is a phychological incentive for a buyer. As for 'overvalued', that's seems to be a subjective concept. Value is static until it's exercised. If you hold a $100 in your wallet, it does not matter (save for a fear of losing it) until you show someone else that you have it, as basis for some value transaction. Can you overvalue a $100 ? Sure, make it a collectible, put a celebrity's signatue on it etc. Provide future reasons for it to hold a higher value. Use it as a basis to borrow $200 (even though that $100 may have being borrowed itself). In a way, real estate has become a fiat just as the actual currency is. While the dollar is a short-time instrument so its value could be exercised immediately, real estate functions as a long-term instrument to transact for a future value. That value is in form of taxes for government, interest for banks/lenders, rent cash-flow, or a potentially higher selling price for the owner. As for the owner-occupied house, it can be seen as being more a liability than an asset. Do you believe that a newly listed property does not hold your expectation of its future value? Well, the seller has not promoted that value to _you_ convincingly enough.