NEW YORK (CNN/Money) - For people sitting in small houses that cost a small fortune, it may be the ultimate real estate fantasy: Cashing in your high-priced housing for a big, cheap spread out in God's country.

It's a persistent dream, with the gap between the nation's most and least expensive housing markets only getting wider. The average house in Anaheim, Calif., now costs $655,000. One in South Bend, Ind., goes for just $93,000, according to the National Association of Realtors.

Such disparities are tempting at least some folks to consider starting lives anew in places with cheaper real estate. In upstate New York, the town of Auburn might be a microcosm for the rest of the country.

Auburn has a rich industrial history. During prosperous times, Auburn's gentry built many large, luxurious houses. But the city's industrial base eroded after World War II and its population dropped from more than 40,000 in the 1930s to 28,000 today.

Now, Auburn has a surplus of amazing homes selling at bargain-basement prices.

Angela and Brian Szeremela moved to Auburn from suburban Atlanta last summer, after Brian took a job in the area.

Angela, a Georgia native, was a bit apprehensive, never having lived outside the South. Turns out, she loves it.

It helps that they found a 3,400 square foot Empire-style brick house for $190,000, half what they sold their house for in Georgia. The Auburn home "would have cost more than a million in Atlanta," says Angela.

This 3,800 sq. ft., 5 BR sold for $65,000 in 2000.

Another couple, Bill and Angela Koon, are from Horsham, outside of London, England. Bill retired from railway management and Angela from teaching, before they moved to Auburn in 2003. They considered other places, including France and Spain, and house prices played a big part in their choice.

The Koons sold theirs for more than $400,000 and paid just $62,000 for a 4,100 square-foot former convent. They put another $60,000 into it to convert ten small bedrooms into two big ones, three small, a laundry room, and another bath. Even then, they had plenty left over to buy an apartment in York, England, which their daughter occupies and which they use for holidays.

They also like Auburn.

"It's absolutely beautiful," says Bill. The only fly in the ointment is that Angela doesn't drive. "She's used to stepping out the door and walking to the market," says her husband. "Everything here is out at the malls."

Connecticut native John Salomone took the job of city manager for Auburn, moving there in 2000. Although he says home prices were not a big factor in his decision to relocate, "it was not a detriment," he says. "In many other places, it was."

For those cashing out real estate chips and relocating, it helps to be retired, like the Koons, or have a profession that can be practiced anywhere.

The Shellenberger home

Judith Shellenberger worked as the executive director for the Christopher Columbus Foundation, in Washington. She was interested in returning to Auburn, where she grew up, to help out her aging mother. Her husband, Alan, is a former plumber and current real estate investor.

Judith convinced her board of directors to allow her to move the foundation to Auburn in 1999. They sold their house in Virginia for $385,000 and bought a stop-gap home in Auburn for $72,000. A year later they bought a gigantic (8,000 square foot), six-bedroom home on three acres in the historic district for $260,000.

Meanwhile, Alan jumped into the rental-property market with both feet, accumulating 26 apartments in town.

One was a "big twin" building – two apartments side by side in a four-story house, for $80,000. He rents out one apartment for $700, the other for $675, and a barn on the property for $175. His mortgage comes to $673 a month.

The Rosenblum house

If the thought of living in a mansion tempts you, consider the house Saul and Audrey Rosenblum will put on the market this spring. It's a 5,000 square-foot brick Tudor in the historic district with a library, formal dining room, eight-foot-wide hallways, six bedrooms, and six fireplaces.

It's one of the top five homes in town, according to local real estate agent and software developer Bob Pflug. Asking price: probably upper $300,000s. (To see more homes in Auburn go to his Web site at www.bobpflug.com.)

Pflug himself migrated here from Richmond, and price was a major factor for him too. He moved into a 5,000 square-foot home, paying $159,000 after selling in Virginia for $225,000.

The extra space enabled him to house his software company. The profits from the house sale enabled him to rebuild a software product.

One thing that homeowners cannot count on in Auburn is any outsized appreciation in property value. With Auburn's economy still soft, there's little possibility that things will increase dramatically.

Being stuck in time can be an attraction, too. For Pflug, Auburn is an "It's a Wonderful Life," kind of place.

"It's a throwback," he says. "The butcher knows my name."