I think the point OP is making is that incomes could not support that level of pricing during 2004-2006, only reckless levels of debts.

Now that 12-14 years have passed, incomes - and inflation - have risen and those same prices appear more reasonable. Accounting solely for inflation, $1.2 million today was worth $970,300 in 2006 and $901,900 in 2004.