I suppose the number one factor would be the amount of skilled labor

The amount of time a master watchmaker (or his close associates) personally puts into a piece is most important. While quality is difficult to measure and opinions may vary, the finish of a Dufour watch is widely acknowledged to be at the pinnacle of the watchmaking craft. This justifies a high price. Of course, rarity is perhaps subsumed in supply and demand, but to the extent that absolute rarity can be distinguished from scarcity (i.e. not enough product to meet full demand), I think rarity is important.

On a different level, the value of a Panerai watch is set by the market, and if you want to own one, you must pay the price that the market sets. I was never entirely comfortable paying that price until I purchased a PAM 190 which has a JLC 8-day manual wind movement. The PAM 190 was relatively expensive for a Panerai, but I felt that the cost seemed appropriate to me due to the movement.

Even if we acknowledge the market's power, we all must decide what price seems appropriate to us and what price seems too high.

I"m concerned that the RM 005 has been priced only in relation to the extremely high prices on the brand's rarer and more complicated pieces. The market for ultra-high-end complications can be seen as a separate market with a much more elastic demand. Most manufacturers that participate in this rarified market and in the basic market price their basic models in relation to the other products on the basic level. A Patek Calatrava does not cost $40,000.