I live in the Willow Glen area of San Jose. We rent. The house we rent costs us $2100 a month. It's old and could use some TLC but it has a HUGE backyard (which was a priority for me and why we are paying a higher rent than we would in other areas of San Jose. I would say the average rent for a 3 bedroom home (with a smaller yard is than ours) is about $2500.
My husband moved us up here a couple of years ago so he could work at the family business.
He makes less than 80k a year. We are a single income family with 3 kids still at home, one in college and we are doing just fine financially. I do have to say though that we have no debt outside of our car payment.
Our kids go to Willow Glen High School and Middle School and overall we are pleased with the education they are getting.
I too was afraid that we wouldn't be able to afford to live here but after an adjustment period of a few months we have figured out how to live comfortably.
Another nice area is the Cambrian area. My MIL has lived there for almost 40 years and thoroughly enjoys it.
I definitely encourage you to do your research though and if you do move up here rent a home for a while. Houses are too expensive up here to lock yourself into a neighborhood you might not like.