I shifted my point of view up to Newark and Fremont, and found that housing prices there are far more affordable than in the South Bay and Peninsula. Of course, there's a reason for that. It's a PITA to get to the South Bay and Peninsula (where the jobs are) from up there. You are forced either onto I880 or CA84 to get anywhere that high-tech jobs are, and I know from experience that those are painful unless you are riding a motorcycle and can lane split and use the diamond lanes. Although things are a bit less painful now that the Mission Blvd overpass is complete and the freeway no longer necks down there. And it'd be a great excuse to buy another motorcycle ;).
Still, *with* taxes and insurance a 3 bedroom house with 2 car garage can be obtained up there for roughly the same as my rent on a 2 bedroom duplex with 1 car garage (once you count up the tax deductions). E.g. on a $300K home, rent, mortgage, and insurance comes to about $1950, and then factor in the tax deductions and it comes out to *less* than my current rent (hint -- 28% tax bracket, and most of the early years of a mortgage are tax-deductible interest, PMI, and property taxes). Hmm. Not bad, assuming the neighborhood isn't full of meth-heads and gang bangers :).
-- Badtux the Sorta-house-huntin' Penguin