Old small house in good areas or New big house in not-so-good areas?

After a couple months of research, I finally narrow down the target location of my future home down to a few areas. Location, location and location are all advices I got from seniors and current home owners.

I have gone thru the dilemma time where I was debating with myself whether I should get a new 2500 sq ft single family home in those not-so-good areas or should I get an old 1300 sq ft single family home in those good areas. I believe all home buyers have gone thru this process.

I have decided to buy/invest in those houses that are hard to get in (houses that will get multiple offers and yes it still happens at this time) than buy those houses that easy to get in (houses that stay on markets for months). Those houses that hard to get in are usually those houses that you can sell quick and easy for a better price whenever you need to.

What is actually driving the housing market down? Foreclosure! But it will be rare to find a foreclosure home in those good areas such as Cupertino, Los Altos, or Saratoga. The prices for those good areas are pretty stable so far. And when the housing market is picking up, my prediction is that those houses in good areas will be going up at a faster pace.

What does “good location” mean to me? Good school district, good neighborhood and environment, and also not so far from my work (<30 mins driving).

Visited a few open house this weekend but nothing too excited, maybe next weekend!