The house, unless its in an unsafe part of town. You will be spending more time in and around the house than in and around the neighborhood. Plus, neighborhoods are fluid and you could end up with a house you are unhappy with and a house you don't absolutely positively love.
Hi - I agree that the neighborhood should be the deciding factor, especially if you like the house a lot. You will eventually make the home your own and love it, but you can't change the neighborhood. I've done this twice, this last time I wasn't crazy about the house but loved the neighborhood. Five years later, I love my house too. I have great neighbors and even know the people in the local stores. Good Luck!
Its all about the neighborhood. Houses you can fix and change and make better, neighborhoods are difficult to fix and make better. Think about these factors:
-the neighborhood is where your kids will meet his/her future peers
-check out the schools in the neighborhood. Is there lots of parent involvement? That is the sign of a good neighborhood.
-Trust me, as your kids get older, you will be spending a lot of time w/ the people in your neighborhood (soccer games, school yard, carpooling, fundraisers, etc, etc.) you will be happier if you really like thes people
Good luck with this decision - it is an excellent question
P.S.I know people who have left great neighborhoods for "better" houses and within a year or two they are out searching for a new house in their old neighborhood.