As someone also living in CV and keeping a very close eye on the market, I agree with FLU that you should find another agent. It seems to me that it should be clear that either: a. your agent has her interests in mind and not yours, or b. your agent doesn’t really know what’s going on. Either way, she should be replaced.
Exploring option a: Surely you’re aware, Richard, that there is a percentage (a very large percentage, in my opinion, but that’s debatable) of realtors out there who will tell you half-truths in order to get you to buy (or sell) and get themselves a commission, regardless of whether it’s in your best interests.
Option b: I’d say “b” is more likely, and that your agent is probably in denial. Down at the realty office, all the talk is happy talk and all the opinions are colored. Plus she gets propoganda from Lawrence Yun in the mail every day. And that’s all she hears all day and she wants to believe it. So she believes it.
If “b” is true, then you should run quickly away. Obviously you shouldn’t trust someone who can’t deal with reality to handle the biggest (I’m assuming) financial transaction of your life. If “a” is true, you should back away slowly without making any sudden moves, because you never know what someone like that is capable of.