[elbucko]

So your saying that adding tens of thousands (or more) dollars to the value of every house and property across America is a bad thing?

Yes, because it is not a realistic value. It is actually not "value", but an inflation brought about by too many people chasing too few dwellings.

[traviskicks]

Yes, because it is not a realistic value. It is actually not "value", but an inflation brought about by too many people chasing too few dwellings.
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You've stated the definition of how value is generated. Supply and Demand set the market price for a good or service.

Inflated value would be the false perception that there is either less supply or more demand then actually exists, or unrealistic expectation that either one will occur in the future.

Since there actually is more demand for housing this isn't the case.