<p>Environmental quality has gradually become one of the most important considerations for residents to choose a location to live in and is increasingly a critical factor affecting the real estate market. We gathered housing transaction data across 1910 Chinese counties from 2014 to 2021 and analysed the influence of air quality on property values utilizing a two-way fixed effects model. Our results indicate that for every 1% rise in PM_2.5 levels, there's a corresponding 0.11% drop in housing price (HP), a trend that holds firm after multiple robustness tests. Furthermore, we find that the effect is particularly prominent in China's higher economic levels, higher pollution levels, and nonnatural reserves. To explain this, we find that residents' expected price in the property market is a potential mechanism for this effect. In addition, regional education level significantly moderates this relationship. Finally, based on the spatial Durbin model, we also find that the deterioration of air quality in peripheral areas increases transaction price of houses in central areas. This paper holds significant value for fostering the stable and robust growth of China's real estate market, offering substantial practical insights for residents' choices in housing location and mitigation of health risks.</p>