I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.
I know, this is an OT remark, but couldn’t help myself. A new guy in my office (west San Fernando Valley) is about to pay close to $500K for a small house that wouldn’t fetch more than $2000/month in rent. He doesn’t want to lose his $8000 tax credit, I guess (duh!)