No, not a famous house. Nor a famous location. There is no mythology here, nothing like anything out of AMERICAN HORROR STORY or anything. There is no "true story" here linking the location to the plot or concept.
The film was, in fact, filmed in the house of the director himself. Oren Peli.
You can see why the film only cost $16K to make.
The Entire Movie, for the Most Part -- Was Actually Improvised
That's right. Oren brought in auditions with nothing more than an outline. No script. Katie Featherston and Micah Sloat were ultimately cast simply by the whim of their own words. They were, in fact, told to just improvise, and that's how casting was conducted.
Nothing too crazy when you think about it except after then pondering on the fact that these two actors had to practically live out their scenes in reality -- with no script, no direction. Just their own fears.
That Alone Is Proof That Horror's an Art Form
When you bring it down to its granular level, fear is basic. An actor simply needs to tap into it. It ties in with all other things, too, like sadness and despair. Think of something torturing you on the inside, and you become a real wreck.
Not everyone can do it. Obviously. We think you have to love the genre a lot to go into that dark place and act as if you'll never come out. Especially when there's nothing to focus on! Like what CGI can do to a movie.
Case in point: PARANORMAL ACTIVITY really had no CGI involved -- at all.
And it still scared the living crap out of audiences for 11 whole years.