You could run into issues where the value of 'pwd' does not equal the value of 'readlink -f .'.
For myself, I use autofs with autohome. It's been a while since I've looked at the details, but I believe it simply does with bind mount described elsewhere in this thread. My main machines happen to be down at the moment, so I can't provide a working example.
Outside of that, I would update /etc/passwd to point to the new location instead.
mrc