I guess everything is relative. What do you consider to be as acceptable "living conditions?" South Walton is a great place to live in my opinion. Beach lifestyle, low crime, fairly safe everywhere you go, plenty of free events, shows, concerts, etc in most every major development, 40% of the land is state parks or state forest.
Regarding schools, they rank well in Florida. As mentioned below, the new Emerald Coast Middle School is under construction. There is a Montessori school in Pt Washington, plus the highly respected Seaside School (charter school), plus the high-scoring public schools. There are no school districts in South Walton. You can choose which school your kid attends for the public schools, but as noted, there is a waiting list to get into the small Seaside School.