My modest 3 br 1 bath ranch in the middle of bohunk PA with 1.5 acres of ground is worth around 80K$. The same plot of ground with the same house in Bucks County (one of the Phila suburban counties) would fetch a third mil or more.
Right! The greatest demand is for land in the best location, which is always in short supply. 
I’m afraid even farm land prices come down to primarily location (though not always for farming reasons). Around here if you are within 45 minutes of one of two big towns, farmland - regardless of production capacity - can be more than 10X as valuable. This has made some lucky farmers who inherited such land potentially rich as the cities grow. Whereas if you go to the middle of nowhere, even “Garden of Eden” farmland is dirt cheap… try looking up real estate prices in Saskatchewan some time. I’ve seen full sections (640 acres) listed before for <$50,000.
Sadley even scrub land that’s useless for farming within an hour of the city is stupidly expensive. You see, for the past several decades people have been buying up cheap scrubland for acreages, and, well, it’s not so cheap anymore. It’s very easy to find million-dollar quarters consisting of nothing but gopher-infested rolling weed patches west of town. Obviously I’ve been looking for affordable local rural land for the past few years… 
Challenge: find a house for sale in Palo Alto, CA that is both under a million bucks and over 1000 square feet. (it’s possible, but just seeing the search results will boggle your mind)
I’m sure there are other such places in the US, but Palo Alto is the only place I’ve seen where it is typical to find a multi-million dollar house that is tiny and sharing a 1/2 acre lot with 3 other such houses and a fixer-upper.
I think location might have something to do with it.
Some mobile homes start at 40k in Palo Alto. But yeah, once you get to actual houses the cost is 500k for a 700 sq foot cottage. At least according to realtor.com
From wistfully watching the real estate listings here, I’d say real estate pricing is about 80% location, 15% curb appeal and charm, and maybe 5% actual house (number of bathrooms, size of lot, fenced yard, etc) unless there’s something dramatically wrong with the thing, most of which is really a location problem. The same house in practically the same location will go for a lot more money if it’s cute.
Curb appeal is a big deal. It’s nothing even close to the effect location has, but you can absolutely sell your house for thousands and thousands more by putting a couple hundred bucks of work into the landscaping, paint, carpet cleaning, etc. But really it’s all about the right neighborhood, away from the wrong roads, what the neighbors’ houses look like, the school districts, etc - in other words, location.
I think you’re looking at East Palo Alto, which is actually a different city. You don’t even want to drive through E.P.A. at night, let alone live there.