Here in Pa. a few years ago there was a crooked developer and appraisers. The developer was selling houses way over their market value and the appraisers were making up appraisals with fake comparables.
The whole ploy was uncovered when some of the home owners wanted to refinance to lower interest rates or sell.
When the banks or mortgage brokers doing the new loans set out their appraisers they were shocked to find out that the home values were coming in 30 to 40% under the original financed price.
Basically what happened after that is many people just walked away and were foreclosed on.
There are a ton of really nice empty houses here now because the banks want the value of the mortgage note which is way more than the house is worth.
No one wants to buy them from the banks cuz they can get an equal home for 40% elsewhere.
I imagine that's what's gonna happen when these over priced houses lose a good chunk of their value.