You can only do so much as an appraiser. Once again, we don't set the market. If that is what homes are selling for, then that is what we have to report. That is a misconception. Appraisers do not give or set values. We report what the data tells us. Having said that, good appraisers will give less value to outlying sales (high or low) and look at the majority of similar homes in the area. There really isn't anything else that we can do. If typical homes in a particular area are selling for x amount of dollars then it is what it is. For better or worse, that is the market and we can only report it. There are always going to be fraudulent sales or sales that sold much higher than market value and the appriser should be able to differentiate between these and market value sales and not include them in a report.

I was under the impression that your whole argument was that banks should guarantee the value of the home never decreasing and take responsibility for hte loss. Isn't that what you are saying?

The bank is there to make money, not protect consumers. The consumers have choices on whether to buy or not. The bank simply provides those who chose to take the risk of home ownership the opportunity to do so. There are guidelines on what the bank will lend. It is not as if they are intentianally lending twice as much as the house is worth to screw the buyer. There are good decision and some that are a bit more risky. It is up to the buyer to determine which purchases have a good chance of doing well/appreciating and which dont, IMO.