[Skeuomorph]

In 2009, it's fair to say the market doesn't understand the term market.

Less flippantly, "the market" and "the market for a well-patterened home" are two different things, and with zero properties of any kind changing hands for 10 - 12 months in certain affluent zip codes (home prices from seven to eight figures and sellers withdrawing listings rather than lower pricing), data is insufficient to establish what the broad market is, much less what a niche market would be. With no comps, pricing becomes arbitrary.

[anamax]

> In 2009, it's fair to say the market doesn't understand the term market.

Actually, it does. Past performance is no guarantee and all that.

> Less flippantly, "the market" and "the market for a well-patterened home" are two different things

Yes, the latter is a subset of the former. So?

> data is insufficient to establish what the broad market is, much less what a niche market would be. With no comps, pricing becomes arbitrary.

Actually, that data tells us that sellers in those places want too much money today. They may be able to get it tomorrow, or maybe not.

> With no comps, pricing becomes arbitrary.

Comps are not the final word on pricing. They aren't even necessary.

People buy when when they'd rather have what you're selling than the money that you're willing to accept for it. People sell when they'd rather have the money offered than the good they currently possess. There's nothing more to it than that.

Cost doesn't come into it. Neither does any notion of "intrinsic value" beyond the above.

If you perceive that the value of something that you have is more than you're being offered, that's the market saying "keep it".

[Skeuomorph]

> If you perceive that the value of something that you have is more than you're being offered, that's the market saying "keep it".

Or, with no supply, and no demand, it could be argued there is no market--no people showing up saying anything at all.

This table is missing a line: http://en.wikipedia.org/wiki/Market_form

"The main criteria by which one can distinguish between different market structures are: the number and size of producers and consumers in the market, the type of goods and services being traded, and the degree to which information can flow freely."

Here we see few to no sellers, few to no buyers, and no information flow. By http://www.answers.com/topic/market definitions 4d or 5, there is no market. By definitions 4a - 4c, the market is halted, illiquid, or frozen.

I'd also argue against the idea:

> that data tells us that sellers in those places want too much money today

It may tell us buyers don't have enough money, which seems a different thing entirely.

Externalities innate to producing a type of home may put such a home out of reach of the set of individuals presently seeking to purchase a home. Building a home absorbs labor, materials, land, and other inputs; those must be paid for in their appropriate markets (not a question of 'perception'), and a rational builder/seller will not build/sell for less than those costs unless forced.