I have some properties I track, the CA one used to be 5x the Midwest one, now it’s only about 2-2.5x.

Chicagoland prices are much lower than California prices, even in high-demand areas.

Chicagoland prices factor in high levels of state and city debt. Someone moving to Chicago from out of state is essentially taking on an extra $85K of debt. While residents aren't directly personally liable for those debts, they should expect higher taxes and lower service levels in the future. A municipal bankruptcy is possible.

https://www.wsj.com/articles/chicago-will-need-a-miracle-to-...

California and it's large cities have their own fiscal problems but generally not as bad.

I don't know. I'm pretty well acquainted with the Chicagoland fiscal situation, which is real and ugly, and this "add $85k" thing seems like a just-so story. Can you show your work getting to that figure?

It's probably some math involving "unfunded liabilities" that the government has (usually oversized pensions or something).

This can cause a cascade where the governmental entity that has the liabilities keeps raising taxes on its constituents so they keep moving outward to the suburbs or away.

Detroit is a famous example of this, but it's happened to other areas (cities have gone bankrupt before).