Market diversification - too many eggs in one basket?

[Krystal Baker]

Hello all!

I'm struggling with a location dilemma, and my husband suggested I ask "that real estate website I'm always reading" - so here goes!

I currently have 5 properties in Kansas City, and 8 in Dayton, OH.  I live just south of Dayton, but am new to the area (almost 1 year now).  I'm ready to buy more, but am worried about getting too heavily invested in one city.  Is that a silly concern?  The area is stable, at least I think it is, and I'm buying in good, solid A/B neighborhoods.  

What do most of you do?  Spread it around, or keep it local?  I know this market, and I know I can continue to make money here, but just as I wouldn't own only one stock, I feel uneasy about owning real estate in mostly one city.  That may not be a good comparison because a city can't really fail as spectacularly as a company' stock, but you get the idea.  As I'm transitioning from doing this as a hobby to making some serious money, I'm trying to make sure I do it the right way (if there is any "right" way).  

I appreciate any input that you all  have to give.  Hopefully I'm just overthinking this, and will keep buying here.  But, I'm not opposed to branching out, and there are other good markets relatively close to me (Indianapolis, Cincinnati, Cleveland, etc.)