The property values in our town have seen a sharp rise in the last two years and our insurance company is now using a BS and greatly inflated 'rebuild cost' estimate to justify their increase in premiums. 

Might inflate home values with the restaurants and what not coming in. 

Out of state parents will often pay whatever for their kids to have a place, which inflates the prices above what market rents will support.   

Here's my story in 3 parts: (warning: they're long but full of lessons you can apply)Part 1 - https://www.biggerpockets.com/forums/55/topics/690349-from-bankruptcy-to-1-000-units-part-1-thru-the-dark-tunnelPart 2 - https://www.biggerpockets.com/forums/55/topics/692382-from-bankruptcy-to-1-000-units-part-2-rising-from-the-ruinsPart 3 - https://www.biggerpockets.com/forums/48/topics/695243-from-bankruptcy-to-1-000-units-part-3-how-to-build-an-empire

@Stephen Neto  It's not so much that everything is overpriced as it's the market rising. 

The neighborhood is on the rise, as everything around my area is, so does that make this a safe deal once I move out?

I kept waiting and waiting, saving and saving... problem was that the dip had already happened.Finally I bought a condo (even though I could've bought a house a few years before) because the prices kept rising.

The sites that I have been looking at is an area where tourism has been on the rise.

Should profit expectation rise with the price of the property?

A rising tide tends to lift all boats, but the boats need to be somewhat comparable and in good shape.As for making way for further developments, they'd need to buy you out as you would own the property AND the land underneath it.