Your other option is to continue to wait until the housing issues further affect the South Bay. Prices in Torrance and the beach cities haven't really dropped that much post-bubble, but I saw my first foreclosure in Torrance the other day, so it's coming.
As you & I know, Milpitas is not the South Bay! Shortsale townhouses here aren't even close to the $200,000s. I would suggest you look at Long Beach. It's has many advantages, is close to the coast, & is much more affordable than the South Bay.
Contact me if you would like more information on my fair city!
The answer will depend on a lot of things. How much debt do you have compared to your income? How much do you have to put down on a home? What is your credit score? What part of the South Bay do you want to live in? Once we know the answers to these questions then we can find homes that fit your unique situation.
As Sandy mentions below, check out the calculators on line to get an idea but also know that it is best to sit down with a lender and find out what they might be able to offer. If you don't know your credit score you can find out online. http http://:www.freecreditreports.com or like ...
I am glad to help you see what opportunities there are for you.
You may want to start by using the How much house can I afford calculator on the CNN money website.
http://cgi.money.cnn.com/tools/houseafford/houseafford.html. Then, contact a local Realtor to the area and they will be able to let you know what you can buy for that price.
Happy House Hunting,