I've read that Apple maintains a database of router locations based on iPhone information. You might want to go to Settings>Privacy>Location Services>System Services and make sure Diagnostics & Usage is turned on, then give it some time with your iPhone connected to your wifi. Hopefully that will update the database with a new location for your router. Might take a number of days for this to happen though. If you don't have an iPhone, invite some people over that have them and let them connect to your wifi.
This might be relevant, from iOS 7: Understanding Location Services:
"If Location Services is on, your device will periodically send the geo-tagged locations of nearby Wi-Fi hotspots and cell towers in an anonymous and encrypted form to Apple to augment Apple's crowd-sourced database of Wi-Fi hotspot and cell tower locations."
You could probably confirm that this is the issue by going to a local McDonalds hotspot (or similar), connecting to their wifi, then using the Find My iPhone app to see if it shows your location correctly.