Housing costs and taxes in the bay area are crazy, no matter how you slice. There is just no avoiding them. That being said, the further you are from the epicenters, the more reasonable things become. Trying to make a go of it in a place like San Jose or Palo Alot sounds insane.

However, the east bay in areas like Walnut Creek or Concord (while still crazy expensive) becomes more reasonable.

One town to check out is my hometown- Brentwood. In is about 60 minutes to the east of San Francisco. It is on the other side of the coastal mountains so it does not get the fog and gloom that San Francisco gets, but it also means it has hotter days in the summer. Brentwood has great schools, an awesome small town feel, great local shopping, great golfing and is close to anything you could ever want. It is only about 10 minutes away from waterskiing on the delta and is about 2 hours away from the Sierra Nevadas. You get bright sunny days from March to November and, even though it gets hot during the summer, it always cools off at night so you can sleep with your window open.

It is expensive, but more reasonable than many of the other bay area cities.

Long story short, the Bay area really is a great place to live-assuming you have the $$$