An apartment in a major us city costs >4x per more per square foot than the adjacent suburban sprawl. Clearly a lot of people realize the value and are willing to take the financial hit to have it.
Is it value, though, that they perceive? Or is the necessity to be in that location that drives prices up? If that's the case, that necessity might not have positive causes either...
What could be more valuable than satisfying a necessity? Your question presupposes some kind of opposition that makes me think you are using words with definitions at odds with the ones I know.
If you define “bigness” of my house as being more value than living next to all my friends in a very walkable city with tons of things to do at any time I want where I don’t need to ever drive my car then sure.
Personally, I’ll take my $500k condo in my very amazing city that is 1000sq ft over a 3500sq ft empty house that is 2 miles from the nearest grocery store.