I think that part of what makes it folk music is the fact that the place names are changed in songs. It's being adapted to the local culture. Sadly, local culture is going out and I feel that sometimes folklore is doing the same thing. Logically this should be because we don't have people staying in the same area for more than a few generations, or sometimes even one. But I've also heard that folklore is supposed to thrive in cultural diffusion. Maybe it's because of all our new technology that it's going out. We don't have a place for it anymore. And perhaps I'm just a pessimist.
I know that I feel like I don't have a folk tradition associated with who I am and where I live. Maybe that's because my family has been moving for the last three generations and we haven't held on to the old culture. But sometimes I feel that I am too much of a purist and I would find it if I looked.
I think I tend to latch on to the folklore of my ancestors back when they were still in Europe. For example, nearly all my favorite folklore comes from the British Isles, but that could just be because I'm merely an Anglophillic American who romanticizes England. Maybe I am searching for the sense of place that some of you seem to have.