Estate agents in the UK will tell you the best value is to buy a cheap house in the best neighborhood. That may make financial sense in that you can gain some economic benefit by bringing the standard of your house up. The downside is every day you will feel like the poorest person in the area. Doing the opposite might give you a better sense of well-being.
> The downside is every day you will feel like the poorest person in the area.
You can offset some of that though by being able to brag about in which neighborhood you live.
This line of thinking reminds me of a tip on gift giving: if you have fixed amount of money to spend, go for the category of items in which you can afford the best item (vs. spending the exact same amount on a cheap item from a more expensive category). E.g. an expensive scarf instead of cheap coffee machine. The reasoning is that the recipient will look at your gift relative to the category it belongs to, and not evaluate what else could be bought with the same amount of money.
