If we lived/worked downtown, we would absolutely be looking in the closer-in communities. For us, we live/work in North County, so we are looking to buy here.
I do agree with you about the older house/larger lot issue. We’ll never understand why people live in those PUD developments, and we only want to buy in older, more established neighborhoods with smaller, single-story houses and larger lots. Unfortunately, lots of other people seem to be looking for the same thing (see, people ARE looking for them!), so these homes/lots are VERY expensive, at least around here.