I'm not convinced that risk as used in this context contributes to price significantly in the residential real estate market. People in this market don't (typically) view transactions as investments and they don't view the home as assets. Lenders do, so the availability of mortgage funds may be linked to price and liquidity but I suspect that relationship is tenuous at best.
Because the liquidity of an asset is a form of risk.
>The reason I think it isn't straightforward
I don't think it's straightforward either, but that only means individual's valuation might be way off.