最初の "so that's how it was"は「あのようになっていたんだ」と訳せます。
二番目の"so that's how things had become"は「あのように物事はなっていたんだ」という訳になります。
Example in context:
"I had no idea how overcrowded my hometown had become. The problem was much more serious than I had imagined it to be."