Over the last few year, countless number of my friends moved to the Bay Area. Once in a while someone would ask me "where is a good place to live in San Fran?" (it's funny that people in LA thinks the entire Bay Area is called San Fran). Even though I'd lived in the Bay Area for 9.5 years (4 in Berkeley, 1 in Emeryville, 1 in Union City, the rest in Sunnyvale), I still feel that I'm not qualified to give advice. So to better help out my LA friends, I started asking my other friends that have been residing in the Bay Area since undergrad. Below are conversational snippets I've had that may be helpful for people [with kids]:
... As for schools district, there aren't that many in the affordable range. Not sure about you, the entire Palo Alto, Los Altos, Los Gatos, Saratoga, most of Cupertino, the good part of Mt View and Sunnyvale are out of reach for me. Unless you want to spend 500k-700k for a townhouse ~1200 sq ft, then you will have plenty of options. There are plenty of 600k-700k townhouses in Sunnyvale, Mt View and even Palo Alto. But one thing you need to know is condos/townhomes don't appreciate much. That is why people live single family home and that's why they are $1M for 1500sqft and 80 yrs old. It is what it is, can't fight it...
SF, Burlingame, San Mateo, Redwood Shores are expensive without good schools. Yeah, people who already bought homes in these areas get pissed whenever I say this. Just look at the list. Alameda, Contra Costa, SF, and Kern (and sorry to tell you this Kevin, LA also) are rated amongst the worst.
That gives you Fremont Mission, Fremont Warmsprings, SJ Almaden, SJ Evergreen that are still reasonably close to the Silicon Valley. I am sure they have places that are nicer and places that are worse. Mission is just as expensive as Sunnyvale, but you get slightly better home. Evergreen is a steal compare to all of them but the schools are just not as good since there are lots of bad Asians here, their API scores are just not as high yet. Almaden homes tend to be above $1 mil. Evergreen will be about 800K, commute is not as good though. So really, SJ only has two good area, Almaden and parts of Evergreen, the rest can be a dump. Almaden is south of 85, Evergreen is where I stay, south east 101. I think it is just a classic case of grass is greener on the other side. Some areas of SJ can be just as bad as LA. But the worst place in CA is probably Oakland.
If you are willing to drive a little to San Ramon, then it is heavenly if you like new houses, open land and open floorplan with lots of upgrades. I personally like walkable places like Berkeley, but lots of my friends with kids are moving to San Ramon. That's basically it, Bay Area is small. Having said that, there are still deals out there... you just need to look harder... Just a warning though, interest rate is super low now. It feels like it is bubbling again. Some homes went up 30% in 6 months.
There are, of course, some dark sides of Silicon Valley. Not all of it is about Google/Facebook and the glamor associated with technology. Bay Area residents, what do you think?