Location isn't irrational. In fact, it's probably one of the most rational factors in real estate pricing in the US. It's one of the few factors that's driven l

Location isn't irrational. In fact, it's probably one of the most rational factors in real estate pricing in the US. It's one of the few factors that's driven largely by the market forces of supply and demand. Locations are "hot" because they're in places with good jobs, good services, good schools (though this one needs an asterisk), access to amenities and culture, etc. Locations are "cold" to the degree that they're in high-crime, poor-service areas, or in remote areas without job prospects. Nobody wants to live in these areas, so with reduced demand come lower prices. A 2,000 square-foot home costs $100k in rural Montana and $1M in Southern California because millions of people want to live in SoCal, and relatively few people want to live in rural Montana. Housing prices in Detroit are low because the job market in Detroit has been cratering for decades while crime has been increasing. A home with a seaside view is worth more than a similarly proportioned home abutting a freeway, because people would rather look at the former than the latter. A home in San Francisco is worth a fortune because lots of people with lots of money want to live here, but the inventory (supply) is limited. Etc. Plenty of factors in real estate pricing are highly irrational. With few exceptions, location isn't one of them. When people pay for location, they're not paying for the house on that location; they're paying for the location itself. That's why comparing X square feet in Y area to X square feet in Z area isn't apples to apples.