The flaw in this question is that you are trying to apply logic and history to develop a real estate valuation method based on rental price. This can be done but you’ve chosen a house in San Diego to apply it to, this cannot be done.

Here’s my best guess, take your 2150 rent. I don’t know what it includes besides rent (gardner, trash, hoa, pest control service, etc.) add those things up and subtract from your rent. My guess is affordable for most would be 15-20% more than rent for principle and interest. The tax and insurance will be offset by the new deduction plus a little more and that will cover repairs and maint.

If you can afford to rent for 2150 you would buy for 2500 to 2800 (principal and interest). The extra 350 to 650 a month would hurt for a few years but would be offset over time because your payment would be protected. Your actual payment will be higher but the tax break will bring you back around your P&I as your true outlay. You don’t need a downpayment to rent so you can’t compare it to a loan with a downpayment in this scenario, but you should have one in reality. You also need to use 30 yr fixed to get your numbers. 400k at 6% 30 yr, $2400 P&I

my guess is 425 to 450 and it’s inline with fundamentals for for a 2150 renter, 400k it’s a no brainer, more than 475, keep renting. Now’s the part where you tell me the owner wants to sell it for 850K because he forgot to take his crazy pills.