We're in a similar boat - albeit on the opposite side of the country. We're looking to get out of the suburbs and buy a place with room to build a shop and get away from neighbors. The good thing is our current house would sell in a week and bring good money. The bad news is any place we would want to buy would cost even more (we're looking at a 50% increase). At least rates are still low, I guess. At some point, we stopped worrying about a 'bubble' knowing that we'll be at whatever house we buy for a loooong time.
How old are you, anyway? The fiance and I are both 38.