It's crazy, isn't it? I was looking at housing prices recently, for places within a 30-35 minute train commute of work (I refuse to make a car part of my daily routine). In New York, for $750k or so there are 2-3 BR places in good school districts in Westchester, right on the Metro North line. Not cheap, but not entirely outside the long-term plans for a two professional family. Similar places in Palo Alto or the like seem to start well over $1 million. Over a million, to live in a place where the nice restaurant are in strip malls!
And if you can expand to secondary cities... it's incredible what kind of water views you can get in downtown Seattle for $500k.