Stan,
I looked at your Excel file and it is very nicely made. You are pretty close to a good price/rent estimate when you assumed 0% appreciation.
You say that “it’s all very dependent on what you think will happen to appreciation/depreciation.” Yes, but not as much as your model shows. In your model, a change from 0% to 3% doubles the price what you can pay to be even with rent. This is too much. You got that large of an effect because you added the Equity Generated and Equity Appreciation/Depreciation as a monthly income. This is not correct since it is not a cash-flow. It is a future realization of a gain and has to be adjusted for net-present value (or opportunity cost if you will call it that way).
I think a 4%-7% appreciation (=inflation) would be fair to assume from the point in time when mortgage equals rent.
If you change your spreadsheet to account properly for the opportunity cost of the paid principal, you will see that even a slight appreciation does not impact your price that much.
I am not sure what the 100% correct way is to do that, but you can try it with assuming that you take an interest only loan. (or even a neg-am loan with going negative by the amount of yearly appreciation). Then you never own the house (but do get a monthly appreciation discount), and that should be equal to renting. You will again see that a $1,000,000 home equals about $6,600 monthly rent. This is the rule of thumb I always use.
So let me know with what updated spreadsheet you come up with.
