To address the OP in their question, I'll provide our numbers:
We are in a higher COL area as well (but not as high as some, like what Houston was like before the housing tanked).
We were paying $900/month for our one bedroom apartment, where I was 3 blocks from work, and we had 1 car. Our rental insurance was something like $22/month, and all of our utilities were included.
A 2 bedroom condo was in the $320,000+ price range, if we wanted to stay central to the city (I was indifferent, but the Mr was opposed, he wanted a yard of our own, and a garage). Houses in the central area, without a garage, and a lot with no real lawn started at around $500,000 for a complete rehab house, 1000 sq ft.
We looked at the transit routes, and bought a place with direct bus service to downtown ($85/month for a bus pass) in an older neighbourhood, on the 'wrong side of the tracks'. The reputation was completely unfounded though. The community is very similar to the town I grew up in, with most everything we need, within walking distance (less than 1km. Costco and the other big box stores are just a 3 minute drive (across a highway though, so walking isn't the best idea). We've had a few car break-ins, but that's been kids most-likely, and the police told me it happens everywhere (we got some alarms and stopped leaving anything valuable in the cars).
We are a 30 minute drive from my Dad's house, down the highway, which is much nicer than the 1 hour+ from downtown to get out to his house.
We bought near the bottom of the drop for us (about 20% decrease in some really over-inflated areas) and paid $373,000 for our house 3 years ago. We were in the position to put 64% down on the mortgage, and got an interest rate of 3.09% on an $89,000 mortgage, and 4% on a HELOC for the balance. Our monthy mortgage housing costs are as follows now (we've paid off the HELOC and borrowed it again for an investment, so we pay only the interest every month):
Mortgage minimum payment is something like $87/week, however I've been making double payments the whole time
Insurance is $88/month
Property Tax is $192
All of our utilities combined (gas, water, electric, sewer, garbage, recycling) comes out to an average of $180/month over the year (more in the winter, less in the summer).
Interest on the HELOC ~$285/month, depending on what exactly our investments are doing.
I also put away $100/week for house improvements and emergencies.
So, our overall minimum housing costs increased to about $1122, and our transportation costs increased while I was still working downtown, but the awesomeness factor of our quality of life also tripled. We have a 1700 sq ft four level split with 3 bedrooms, and 2.5 baths. We have a partially finished basement with an office in it, and a decent enough yard for our needs. We have parking for 2 very tiny cars in the garage (well, parking for none really, since it's usually full of my husband's furniture refinishing projects) and parking for 2 on our driveway, which makes it much easier to have people over. When we lived downtown, our parents hated visiting us, because parking was such a nightmare! Now we see my Dad a few times a month, and my mother in law at least a few times a week.
We've got more than enough house to have some kiddos in, and we won't need to move ever. And there were some neat bonuses to our house, like a pre-existing sprinkler system (saves water on keeping the lawn green, as it only needs 5 minutes 3 days a week). We were also able to buy all the outside furniture, and lawn maintenance equipment from the people selling the house, for a tiny fraction of what it would have cost us otherwise, since it was so convenient for them to just leave everything behind.
Since our investment in our house is holding value, and we won't be selling it anytime soon, it seems like a safe enough place to park the majority of my $$$ thus far. I also have RRSPs and other investments totalling more than enough to pay of the LOC if we needed/wanted (and a good additional chunk of the mortgage as well).