I think average prices are a lot different than "what you can find", too, though. I live in what is one of the most expensive neighborhoods in the world, in a fairly decent sized apartment, for less than the price you all are quoting. Only problem is I can't afford to shop here or eat here
A friend of mine just moved into the tiniest apartment I've ever seen in a run-down building for more than I'm paying....that's considered "average", but you could definitely find something cheaper, and nicer, if you take the time to look.
I have friends who live in Chevy Chase and Georgetown in DC, and pay less than $1000 for a studio or have roommates in a 2 bedroom for around $2000. They're not totally sketchy, TEENY apartments either. They're just regular apartments in pretty nice areas of metro DC.