Wow, time warp baby! Bikerider, the world is a very different place today than the one you remember. It is very common for two married 25 year olds a couple years out of college to have $50K+ jobs each with combined six figure HH incomes. These are the types of 1st time buyers we see in the market. The young couples with $40K combined incomes you are referencing is what we call renters in these parts of the country. Unfortunately, some were suckered into buying with no doc loans but they should have been renters not buyers.
I didnt bother to check your math but simply taking your $150K price and multiplying it by 2.5 (i.e. 100/40=2.5) we get to $375K. IMHO, when all is said and done there will be a healthy 1st time buyer market between $300K and $400K for nice places not dumps in SD.