Clearly there are a lot of factors in property value, but there is a big one that affects property value that no one likes to talk about... interest rates.

Supply and demand are obvious things that drive the market, but what if interest rates went up to 6% tomorrow? When interest rates go up, property values go down not long after. If you disagree, answer the following question.

If I'm qualified based on a monthly payment I can afford, and that payment at 4% APR allows me to buy at 250k house, how much can I afford to buy with a 6% APR?

No matter how you look at it, the answer is "less". If your home is listed for sale at 250k, and interest rates go up, there are going to be fewer buyers for your home. This means lower demand, and that never helps your value.

Interest rates in the 1980s were 18%. If you bought a home today at 250k (finance the whole 250k) with 18% APR, your mortgage payment would be north of $3700 a month. Someone who would qualify for a 600k or more home at today's rates would now only qualify for a 250k loan. The bottom line is that if interest rates go up, people cannot afford as much house, and as a result demand dwindles.