Chicago and Minneapolis and other big cities don't count in my estimate. I'm speaking more about folks in places with very low cost of living, and no tech industry to speak of (but there are nerds everywhere). The fact that you work in a co-share with a dozen web developers means you work in a place where developers are a known quantity and have a reasonably high value. There are developers in Idaho, too. They don't usually make $80+/hour, even on contract, unless they're famously good.

Unfortunately, I can attest to this. I am one of those developers who live in a low cost no tech industry smaller city and I would cry tears of joy if I could land a job for $80/hr. I understand my value and I understand what I can bring to the table but that doesn't mean jack when potential clients could "make a website in Word if they just had the time."

This is exactly correct. I work in a midwest city which I'd consider small/medium sized, and my entry level salary five years ago was only around $20/hr (which, as a single guy with a low cost of living, seemed like a lot). The most I've heard of a developer making here was somewhere on the order of $65/hr, and that was considered very high. If I went to Chicago, that wouldn't be high at all, but my costs of living would also probably triple.