There are several ways to look at your question. From strictly an investment standpoint, it is preferable to buy a home inside the neighborhood than on or next to a busy street. I can show you many examples of homes on or next to a busy street like Redmond, Meridian, or Camden that take forever to sell, no matter whether it is a sellers market or a buyers market.
Then there is the pragmatic side of this equation. Look at your goals, both short & long term. I could never recommend you to buy more house (price-wise) than you would feel comfortable fitting in your monthly budget. Only you know your lifestyle, future potential for raises, bonuses, etc. I know everytime I have bought a house, it has felt like a real stretch. But in today's financial climate, I would be remiss to have you stretch to the point where you have severely limited your ability to also enjoy life, and meet all other financial obligations.
There are several other neighborhoods in San Jose that offer very good schools with a lower price point than Almaden. While I do not know what your goals are, or the reasons to look just at Almaden, I would also suggest that depending on where you are in your life, your next home may only be a 5 to 10 yr home. And I would rather you purchase a home that will have a good future resale value because of a good location relative to neighborhood, etc, than one on a busy street in Almaden. I believe your future value in the home will be much more to stay away from the busy street.
Of course, I am not trying to talk you out of Almaden. I am just trying to keep you from becoming a statistic, one of the many folks who are currenly struggling with house payments, and losing their homes to short sales & foreclosures.
If you would like to discuss this more, feel free to give me a call - 408.712.3432.
Happy House Hunting,