There are several ways to do a "local search."   But note that you should make sure that the seller is willing to allow local pickup - don't presume that just because you can find an item close to you, that the seller will allow you to come over.  If the listing doesn't say "local pickup," be sure to click on the Ask Seller a Question link and ask the seller before you place a bid.
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One Alternative:   Use the Distance Section on the Results Page

On the left side of every eBay listings results page, under a heading called Search Options, you will find a check box with the phrase "Items within 200 miles of ____."   The section you want looks like this:

[_] Items within [ 200 ][v]
     miles of [ xxxxx ]

If you tick that check box, choose a distance from the drop down list (the default option is 200 miles), enter your zip code in the text box and then click on the Show Items button a little further down, you will see items that match your search within the distance you chose from your zip code.

A Second Alternative:  Use the Advanced Search Page

Click on the Advanced Search link in the upper right-hand corner of any eBay page, then on the Advanced search link at the bottom of that page - that will bring up the advanced Advanced Search page which has a large array of search options.  Scroll down to the Items near me section, then enter your zip code or choose the desired city from the pull-down bar and choose a distance.  Then click the Search button.

A Third Alternative:  Search/Browse by Distance from Popular Cities

You can search by distance from various popular cities.  Click on the Advanced Search link in the upper right-hand corner of any eBay page, then on the Advanced search link at the bottom of that page - that will bring up the advanced Advanced Search page which has a large array of search options.  Scroll down to the Items near me section, then choose the desired city from the pull-down bar.

A Fourth Alternative:  Add the Distance Column to Your Display

You can also simply add the Distance column to your results page, then sort all the results by clicking on that column heading.  
To set that up the first time:  Click on the Advanced Search link, then on Customize search options.  Then click on the Customize Display tab.  Lastly, move the Distance column from the left-hand box to the right-hand box, and Save.  
Again, this will work in a subcategory as well as for searches.

Sort Results by Distance
Once you have done your search, you can click on the column heading labeled Distance to sort the items to find the ones closest to you.

A Fifth Alternative:  Add a zip/postal code to your query

Simply add a valid zip/postal code to your query. Example: vw jetta 94130. A message located above the search results will prompt you to search for listings near the city that matches the entered zip/postal code. The message will not be displayed if no listings are found near the zip/postal code defined in the query.
If you click on the message, listings near the zip/postal code will be shown.

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For a long while, you could plug your ZIP Code at the end of this URL: http://local.ebay.com/. For example, to search for items near eBay headquarters in San Jose, type http://local.ebay.com/95125  in the Address/Search bar of your web browser.  But eBay has apparently disconnected that function now.
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Note to sellers:

To make sure your items appear when buyers look for items locally, simply list with your ZIP or postal code in your Item Location. If you don't want your items to appear in local search results, don't include your zip code in the Location field of the Sell Your Item form.  You may need to use the "customize your listing" form rather than the "simple" listing form to set or change your location.