ctopher,
As a mechanical engineer, you have many more options than someone in, say, aeronautics. In particular, the biggest cities aren't your only option. There are manufacturing and engineering firms in most towns of any size.
There are always tradeoffs. If you hear of a place with great scenery and 4 real seasons that are mild, let us know. We'll probably beat you there.
Having worked in the Long Beach area for several years, I agree with your conclusion that So. Cal. is no place to raise a family -- whether your concern is the hassle factor or the dysfunctional environment.
Yes, California is a beautiful place - when the smog lifts and/or when you have time to look, which isn't really very often - with all the time it takes to get around. Still, I know how hard it is to steel your nerve to leave. You will wonder for a while if you've lost your mind. But that sort of thing happens whenever you pull up stakes.
Just make sure your wife won't be irrevocably unhappy. She needs to find something about a new area to like enough to call it home. If not, you will be moving again within a few years, and when you try to go back, house prices may well be even further out of reach. I've talked to engineers that's happened to.
Mid - and east-Texas have a generally good climate, but share the extreme summer humidity problem with the entire south. I honestly don't know how people managed to live there before air conditioning. Maybe some people aren't so affected by humidity.
West Texas doesn't often have high humidity; but if you don't like El Paso, then I suspect you wouldn't like Amarillo, Lubbock, or Midland. But there are many others -- Harlingen, Brownville, Corpus Christi, Austin, San Antonio, and San Angelo to name a few prominent ones. The latter three are particularly nice to visit, but they are far enough east to get some of that famous humidity.
West Texas has decent scenery, especially near Big Bend National Park. The towns of Presidio, Laredo, and Zapata have plenty of western character, occasional turbulent growth, and, no doubt, good engineering opportunities.
Most places in smaller towns will have a lower wage scale. You might not find a job paying more than half what you now make in California. So you have to decide what you really want -- high reportable income with high expenses and a hostile family environment, or moderate income and low costs with a good family environment.
There have got to be other smaller towns around the country with a good mix of income scale, cost of living, locality benefits, and family friendliness. I'm sure the other contributors can offer more suggestions along these lines.
In summary, if you don't have to limit yourself to huge, unlivable megacities, you have lots of options besides Dallas and Houston.
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