I live in Southern NJ. It usually takes me less than 2 hours from my driveway to the employee lot (although, a few times in the past three years it has been more than 3 hours, but my record is 1 hour 15 minutes). I always have a variety of routes in my head, and I listen constantly to the traffic reports every ten minutes while driving to work. Can be stressful driving, but then I remind myself that I'm not commuting on an airplane.
Four years ago, I bought a nice 4BR colonial, about 15 years old, in a very nice neighborhood, for about 200K (houses in my neighborhood lately have been selling for about 300K to 325K). Our school district is among the best in the state (which is significant, considering NJ has among the best public schools in the nation). There are lots of shops and restaurants in our town, and we are 30 minutes from center city Philly (if you care about the big city thing).
I also forgot to mention that I sometimes take the train to work, which eases my commute. And, now with the EWR layovers, I plan on even more nights at home (while being paid per diem).
It is possible to live affordably within reasonable distance to NYC.
