I stayed at Angel's and Iaia's flat for a little over two months beginning in late April. I was talking classes in Madrid and the location suited my needs quite well.
The good:
The local is great. I rarely used the metro even though it is but a short walk away. As others have pointed out the super markets, bars, restaurants and cafes are all literally next door. Very lively street scene, but can't be heard in the flat to any great degree. Museums and other sites just a short walk.
The less than perfect:
If the outside temperature stays below 26C/80F, it's perfectly comfortable. However, Madrid can be super hot in the summer. I survived a few heatwaves during my stay and it can be rough. There is no air conditioning, only a fan. To complicate matters the bed is raised off the floor and near the ceiling which is the warmest part. I ended up sleeping on the couch, which is not a sleeper, quite a few nights because it's cooler. Keep this in mind if you're thinking about staying during the hottest months.
Other than the above, I enjoyed my stay. I didn't have much contact with my hosts past the initial checkin, but I also know the city quite well having spent a fair amount of time during past trips.