(Sorry for the multiple comments here.) I should add that I've been thinking about "location" in terms of neighborhood, rather than geographic area. If you offered me my dream house in, I don't know, Siberia, I'd probably be hard-pressed to actually accept it. But I wouldn't be looking to buy in Siberia in the first place, so I don't know how far I can extend this issue...

Ultimately, I think a major purchase like this comes down to gut instinct, and it may not be as easy to separate out those two factors in that scenario. Plus, it probably depends on where you are in your life, whether you have kids, job security, and many many more factors. Head versus heart, passion versus reason, and all that.