Yes, housing costs must be much higher here. Our house is 2400 square feet, and we beat the builder down to $200K when we bought it three years ago. Although we have some big houses a half mile or so to the east of us, our neighborhood is a mix of two stories and ranches -- a nice neighborhood, but nothing pretentious.
I'm sure we have extra costs due to insulation and different construction required to withstand the winters here. Also, almost all the houses around here have basements, something that I've heard is not common in other parts of the country.
I don't think it was exactly what he had in mind :')
Sounds nice, though! But where do the kids stay when they visit?