I have seen 4.375 and 4.25% rates on 697K loans. I have seen sales of premium homes in premium neighborhoods in NCC go for close to $200. If you say we are nowhere near $200/sf in a premium area or anything approaching $200/sf is dump you arent looking hard enough.
Here are a few sales around $200/sf for homes at least 3500 sf built in the last 10 years:
