Some insights into real-estate pricing

I have discovered some insights into how Real-Estate companies price their properties. Although the macro factors are quite standard and well-documented, I recently witnessed an unprecedented example of how this bubble takes shape.

I'd visited the R.N.A. (A.A) builders stall at the MCHI property expo, and one of their "complexes" in Mira Road - E - RNA Courtyard - was quoting Rs. 2741 psf, the date & time for this quote was 28-Oct-2007 20:00 Hrs.

This week, I decided to give a few followup calls' to all the builders just to get a sense of where the market was headed. And lo-behold, RNA Courtyard was hiked to Rs. 3441 psf, an appreciation of Rs. 800 (or 29.18 % ) within a matter of 5 days, whereas ALL other projects were quoting the exact same price as at the Expo. This startling appreciation of project quote points at two facts:
1. There was a huge demand for that property at the Expo.
2. Most likely there are a few products remaining to be sold.

However, there is one more aspect of Real-Estate pricing which has come to fore, which is "Benchmark Pricing" & "Incremental Valuations". The concepts are fairly rudimentary and quite obvious but, to know that such methods are still being followed in what some experts call a "mature" industry is quite disturbing. Its' akin to you being priced in increments when you buy anything, so imagine someone charging Rs. 10, 12, 14, 17, 20 for 5 Pepsi Bottles that you buy. Its' a classical definition of a "Sellers Market", the market valuations are almost being twisted on its' head based on purchasing power of consumers. There is one downside though, with speculators so rampant in such market, there is a huge amount of value that's being lost because ultimately gains made by an individual have opportunity costs, and by spending out of your nose to buy a flat will ensure, other commodities face a decline.

I can clearly see the begining of the end, although my confidence in this prediction is shaky, because I've grossly under-estimated the holding capacity of Indian speculators before.