If that's the price houses are selling for, that is the market price.

I'll rephrase it this way. Cash buyers are paying way above and beyond what the house was listed for.

Likewise prospective renters are offering rents above what is advertised.

In my case, I bought a house last summer and offered exactly the seller's asking price -- which they rejected, countering $5k higher (which I agreed to).

I sold a place in the bay area 5 years ago. I knowingly listed it about $200k under what we expect it to go for based on comps. Huge swarm of interest and many buyers offering a price at around what we expected.

It's just a sales strategy.

Any other year I'd accept that. However, that's unlikely to be true this year - in most US markets. Buyers and renters alike are bidding up properties because there is one property or less for every 100 prospects.

Here, landlords get 400 applicants the first day a rental is listed. The second day they get 400 more unique applicants. The rental we just moved into was up for less than 2 hours and received 50 applications. We won by paying 6 mos in advance + last + 1.5x security.

There have always been hundreds of prospects for each house sold. When I sold the aforementioned house we got roughly 500 people the first weekend and we were in contract after just a few days. It's been a hot market for a very long time.

Sellers set a low price because the price doesn't matter. It will be bid at the market price regardless.

Most buyers know this and bid their estimate of the fair market price, which may be well above list and hopefully the reserve price. This is a sensible strategy when the seller has no idea what a reasonable price actually is but there is a large number of buyers.