[quote]That same lot could easily have a 3000 sq ft home on it which would pull the $/sf down under $250.[/quote]
It could, but it doesn’t. And no one is going to spend $500k to buy this house and then $400-500k to replace it with a 3000 sq ft house that is worth, as you say, under 750k. So I fail to see the relevance.
Houses of similar size and quality were selling two years ago in 92129 (arguably a better area) for high 300’s and low 400’s.
