To my unending glee, I was right. In 2005 it sold for $505,000, and then last year it sold for $299,000.
My favorite metric for a reasonable house purchase is the price-rent (P/R) ratio. It's not the most complete, but it's easy to calculate and it appeals to common sense; it also points to whether buying a rental property is a good investment or not. (Rental income only covers half the mortgage payment? Probably a bad idea.) Take the price of the house and divide it by the cost of renting that same house for a year.
I started thinking about this again because of a couple of foreclosed duplexes under $400,000 that appeared on Redfin. When I was living by myself, renting was a no-brainer: this lovely 1-bedroom apartment is an extravagant $1400/month, which is maybe a $250,000 house, which doesn't exist around here (certainly not near the train station).
Once you start looking at 3-bedroom rentals near the train, though, you're looking at rents over $2200/month. The rule of thumb is that for a P/R under 15, it's better to buy, and over 20, it's better to rent. With my rent going up, the denominator in the price-rent ratio, the ratio goes down.
Sadly, the housing crash is coming slowly to this part of the Bay Area: it's a nice place to live, and there are far too many people with lots of money, especially since we're in yet another tech bubble. I have faith, though. I think houses in this neighborhood have about 15-20% to fall before being in line with the pre-bubble trend.