Great article on home prices here. When I do a market analysis I look at two parts. The objective data which is the perspective of the appraiser and then the subjective value of the property. The objective perspective is a look in the rear view mirror to determine value based on what has happened in the past. The subjective perspective is looking at what top dollar is based on many more factors not the least of which is competition in the market place. When you are selling your home and you are "the only game in town" you can command a much higher price.
Why is it so expensive to buy a house in Seattle right now? Everyone seems to have someone to blame: Amazon, priced-out Californians, foreign buyers, developers tearing down old homes to build huge new ones.