Why Those in the Real Estate Business Will Always Put a Positive Spin on the Real Estate Market

1. Buyers' agents get nothing if there is no sale, so they want their clients to wildly overbid, the exact opposite of the buyer's best interest.
2. Mortgage brokers take a percentage of the loan, so they want buyers to take out the biggest loan possible.
3. Appraisers need mortgage brokers for their business, so they are going to give the appraisals that brokers and agents want to see, not the truth.
4. Banks get origination fees but have been selling most mortgages, so they take no risk on those loans. They do not care about the potential bankruptcy of borrowers, so they will lend far beyond what buyers can afford. Banks sell most loans to Fannie Mae or Freddie Mac. The conversion of low-quality housing debt into "high" quality Fannie Mae debt with the implicit backing of the federal government is the main support for the housing bubble. That is going to end as Fannie Mae shrinks.

Even for loans that banks keep, they have a motive to lend beyond what buyers can afford. Banks designate interest as "income" whether they receive it or not. As long as borrowers do not actually default, additional borrower debt is counted as bank income, and banks can claim higher "earnings". That is going to end when those borrowers cannot even make the principal payments.
5. Newspapers earn money from advertising placed by Realtors®, so papers have a strong motive to publish the Realtors'® unrealistic forecasts.
6. Owners themselves do not want to believe they are going to lose huge amounts of money.

What is their argument for buying vs. renting, even in a down market?

"There are great tax advantages to owning."