[ticulatedspline]

It's a lot of factors that kinda organically all work to create the market. supply/demand/"what the market will bear", along with assessments of land, labor and, some self reinforcement from the fact that many people don't actually own their home.

Land and labor are pretty easy to see, a brand new house simply has a cost and that cost helps dictate many things. Obviously nobody is paying $500K for something if you could build from scratch for $50K

Supply/demand. if nobody wants to move to an area obviously no matter how nice your property is it doesn't hold value. Or if the area is desirable then your property is worth more. Even with medium demand if there's no supply price goes up and it will go as high as the market will bear.

Then you have "I can't afford to sell for less". if you bought a $400k house and still owe $300k on it you're not going to want sell for less otherwise it would literally cost you money. If the market slumps you might just stay put until things get better. With a lot of stuck people this could get better because it will drive supply down until the market comes back to a level where people can afford to sell.

And all of these factors can change at an interval of a few dozen miles so each little market can have very different factors and prices.