It's being illustrated right now.

Your path illustrates a great point.

But the chart above illustrates exactly the point you're making and that's why I posted it. ;) So it's actually a great idea to keep an eye on this metric as its often used as a benchmark for the health of the SFH market. 

I had another property we bought earlier this year that we started our offer $400k under list and purchased it for $250k under list.I use these dramatic examples to illustrate that it doesnt matter what the list price is....what matters is what is realistic for the market.

I guess what I'm trying to illustrate is that you should figure distance into your choice of where to look. 

@John Reynolds thanks for illustrating the crime issue!

Dropping the rents $100 a unit would still cash flow $200/door with the tenants paying utilities.Numbers at a glance:Gross Income- 22260Taxes- 2084Insurance- 1000Management- 2226Utilities- 9500NOI- 7450 assuming no vacancy or CAPEX (just to illustrate how bad the current numbers are)Debt Service- 6535 (30yr, 20% down, 5.5%)Annual Cash Flow- 915 (Actual for this year with my debt service is -4797 due to CAPEX and no vacancy).

The numbers I used are solely for illustrative purposes. 

I believe @Brandon Turner illustrated this technique in one of his books, and others on the site have elaborated on it in blogs.

Once all the repairs have been completed and all invoices have been submitted, the insurance carrier will finalize their subrogation demand to recover their settlement & your deductible.While there are a few comments discussing the issues with insurance coverage & premium surcharge, the size of this loss warrants filing an insurance claim and illustrates the benefits of insurance.