I live in the North Bay. The area is expensive for a reason - it has lots to offer.
At 26 you're too old to have roommates, and the right age to be wanting a house of your own. So far it makes sense. What doesn't make sense is the pricing of homes in the area. My home has taken a 10% hit in the market - not huge considering how much speculation has been seen in lots of areas, and I doubt that we will see too much more decline here in Sonoma County, so waiting around for "affordability" could be a long wait.
The biggest hurdle to getting into a home in the area is the down-payment, that's why so many shysters are touting 110% loans and such. That said, the fastest way to scale down the down-payment is to scale down the purchase price. Established homes and new developments are really expensive ----- but:
1) Foreclosures are up. Keep an eye on those. Lots of people got in over their heads on creative financing, leased cars, credit card debt, etc. There are bargains to be had there.
2) The duplex/triplex idea is not bad as tenants will pay lots of your mortgage. However, study up on being a landlord and get good insurance. The biggest downside to living in a duplex/triplex and renting part of it is that your tenants know where you live. No small thing.
3) You're a techie. Consider a telecommute if possible. Even a couple of days a week of telecommuting can make putting some distance between yourself and the office palatable. Also, commuting requires transit - like bart - or you'll go nuts.
4) Consider building your own home. That's not as nuts as it sounds. The assessor's office in most cities has a list of available, buildable lots that you can get for a very small fee. Find a decent one (notice I didn't say Los Gatos or Belvedere) and put a small home on it. A manufactured home (no, not a trailer) from a place like
www.irontownhomes.com; they can put a place together for about $125/sf instead of the $600-plus you're probably looking at.
5) If your schedule permits, consider getting a real-estate appraiser's license and doing part-time appraisals. You'll learn lots about the market and where bargains are to be had.
Once you're in you are light-years ahead. Don't give up yet.
Jim