Determining a market area's value

[Marcus McCauther]

My wife and I recently listened to BiggerPockets Podcast Episode: Show 6, and Arthur Garcia mentioned that he determined an area's value by noticing that the cost to build was higher than the cost to buy. I hope I didn't quote that wrong.

This made us wonder how to determine an areas value. Do we use the method mention above or are there more factors to consider? How do you accurately identify if an area is in a downturn or if an area is over valued?

Thanks in advance for any help in clearing this one up for us.