This last Labor Day weekend I snuck away for a vacation with the family and thus got to observe several different real estate markets. I know it's sick, but I do pick up real estate magazines everywhere I go:-()
The first market was a North woods resort town. The economy is seasonal with the result that recreational properties are really expensive, but residential properties in the town are really quite cheap.
The second market is a blend of tourist town, small college town, and forestry/agriculture. It's a town of 11,000, but all types of properties outpace our market by $20,000-$30,000.
My market has 100,000 people, but homes remain moderately priced w/the median price being $137,000.
In observing the market, it appears to me that neither the local economy, style of town, etc... had much to do with the differences.
Price variation came down to supply and demand only. Readily available types of properties remained moderately priced while limited properties were highly priced.
Is supply and demand the main factor in your market or is it something else?