I live in the San Francisco Bay Area between San Francisco and San Jose (Silicon Valley), our primary employment for the area is the tech sector (software engineering, tech development - Google, Facebook, etc) but we still have a bit of the biotech industry holding on (most jobs were moved overseas when Roche bought Genentech). Other employment (accounting, marketing, admin) is strong but most of those positions are utilized to run the big tech companies where all the 'real' money is.
The job market here is strong, hiring is up, and our population (and traffic!) is increasing rapidly. I think we've got the most job growth in the country right now but unfortunately, we still have a lot of highly educated, highly qualified people who are out of work. Companies are hiring people from overseas (I blame this on our education system) and I've seen an influx of people from out of state moving here for work. I believe companies are hiring from out of area right now because it's cheaper.
People coming from other parts of the US think they're getting a massive pay raise but we're the most expensive place to live in the US (outside of the city of Manhattan), so technically it's a pay cut and they're often downgrading their lifestyle but they really don't know it until after they've moved here. They don't know what to negotiate because they can't calculate their living expenses realistically. I've seen it happen so often since I've done professional relocation for Google, Sony, Nintendo, Ericsson, and Open Wave. Very few people I've helped have been able to stay and only one family has been able to purchase a home here.
Our housing prices are up but inventory is low; average priced homes are getting bid up $100k and luxury areas are being bid up $500k with multiple offers more common than not and homes not lasting a week on the market. We've seen an influx of all cash investors from China (they can't own land there) and I believe it's because we have the employment so investment properties are safe here.
The taxes in CA have gone up but not as much as most think, a majority of the raise is actually old tax breaks expiring. But hopefully with all these job increases we'll see more money flowing where it needs to go - supporting local businesses and mom and pop shops!