It’s just such a bummer that the absolute worst financial decision of my life is to live in my favorite place in the world.
I get it, it’s how the world works, but it sucks to choose between daily happiness and financial security.
Unfortunately with the exception of Sacramento (which is getting pricey as of late) California doesn't have a lot of middle ground between its really desirable yet expensive places and places that are affordable but less desirable. The Sacramento area seems like a reasonable compromise for me. I can comfortably afford Fresno's and Bakersfield's nicest suburbs, but I don't know if I'd be happy in those cities. Much of the rest of the state is quite isolated from major metro areas; this has implications regarding educational opportunities for children and health care quality and availability. I don't see myself settling down and raising a family in many of California's more isolated areas due to this, though it may be a nice adventure visiting these isolated areas for recreation.
I don't know what I'm going to end up doing....maybe I'll end up marrying a woman from Vermont and end up moving there in a few years XD. But I completely sympathize with you and the crazy housing market we're contending with.
One of the big benefits is that there are so many options for day trips. Visiting Lake Tahoe and the surrounding mountains is an easy day trip. Visiting SF or the beaches is doable in a day. Napa is close. For hikers, runners, and bikers there are tons of bikes paths and hiking trails all over the Sacramento region. And there are a lot of neat places in the nearby Sierra foothills.
To summarize: If you prioritize nightlife, music, and food, Sacramento might not be the best fit, but if you prioritize affordability (relatively speaking) and getting outside, it's hard to beat the Sacramento area.