Can someone explain the crazy property market?

With the housing market so volatile, vendors are girding their loins while buyers are hopelessly confused

Our little house in the hood is on the market. It smells like orange zest and window cleaner, and I don't see how it could look any cuter—it is a plastic red Monopoly house brought to life, squatting on a prominent corner, palm trees and agaves gathered round it like disciples.

All we can do now is wait for those cashed-up buyers we were promised to come rushing through the doors.

We may be waiting some time. Not long after it was reported that property prices had hit a record high, the Real Estate Institute has released January sales figures that show house sales fell to their lowest point in nearly 20 years last month. In fact, says the Herald, there is a "flood" of unsold houses on the market, a year's worth of them.

You would expect house prices to take a tumble and fairly quickly, at least in centres such as Auckland and Queenstown where housing affordability is worst. But no, according to the Real Estate Institute, house prices dropped just 1.6 percent in January. What gives?

Certainly, my experience in Auckland is that there are a lot of people sniffing around houses—but how many of them are serious about it? It's hard to gauge when you throw off your jandals at the front door next to a pile of boat shoes, trainers and Kumfs (practical people, house buyers) then get stuck in the loo with three strangers all smiling foolishly and trying not to look one another in the eye. Nor does the picture become any clearer when you oh-so-casually ask the agent, "So, what are the vendor's price expectations?" as barefoot couples clutching glossy brochures eavesdrop, to get the inside scoop.

Some properties pull the punters like flies to the honey pot. A tired Meadowbank home with a glorious garden and potential to subdivide made me tearful. I will not soon forget the woman who toured the house sucking a red lollipop, ta very much, turned to her partner and whined, "I want it!" That place was snapped up in a twinkle.

Likewise the ugly brick tardis in Kohimarama. Gone before the first open home. I am still wistful as I drive by on my way to other homes with less potential and bigger price tags.

I am now at the point where I look for less desirable properties to view because I can't handle the competition at open homes. Even then I get it wrong. A musty do-up with cell-like children's rooms was a crowd-puller. A teeny bungalow with a weird extension that felt like it belonged to another house, overlooked by a toilet block for pity's sake, was buzzing. A dank, subterranean-feeling townhouse with no outlook and no yard swarmed with people. Okay, it was in St Heliers, but still. It smelled. It's nuts. The whole scene. Crazy.

But the REINZ figures tell a different story, a sobering story, and one that has echoes in the Tax Working Group's efforts, Allan Bollard's recent comments, and the number of unemployed. Meanwhile, the little house in the hood is yet to be swooped upon by someone looking to get on the property ladder.