If Bay Area home prices make you want to lie down, Gilroy might be worth looking at. Median home price here is around $900,000. That's roughly $350,000 less than San Jose, thirty miles north. In a county where $2 million barely gets you a house in Cupertino, Gilroy is one of the last realistic entry points for first-time buyers.
We get asked constantly whether now is a good time to buy here. Depends on the neighborhood.
Where the money goes
Glen Loma Ranch is the newest development, west side of town. Modern builds, community pool, playgrounds. Expect $950K to $1.2M+. The catch: HOA fees ($150-250/month) plus Mello-Roos taxes ($3,000-5,000/year on top of property tax). Still cheaper than the down payment difference between here and Los Gatos, but factor it into your monthly.
Eagle Ridge is similar: new construction, comparable prices, same Mello-Roos trade-off. Both neighborhoods draw families who want fresh paint and predictable maintenance.
Old Gilroy is the opposite bet. Victorian and Craftsman houses, many 80+ years old. $750K to $1.1M depending on condition and lot size. The downtown revitalization work over the last few years (new restaurants, street improvements, streetscape upgrades) has been real, and people who bought here a decade ago at $600K are sitting pretty. The bones on these old houses are solid. Thick plaster, real wood framing, built when materials weren't being optimized for cost.
East side has the biggest lots. Quarter-acre or more is standard. $850K to $950K. Mix of ranch-style homes and older properties that need work. Good for people who want space for a garden or chickens or just room to park a boat.
FHA loans actually work here
This surprises people: the FHA loan limit in Santa Clara County is $829,000 for a single-family home. That covers most of Gilroy's inventory. Put down 3.5%, and you're in. Try that in San Jose or Palo Alto and the FHA limit barely touches the market. If you're a first-time buyer without a massive pile of cash saved up, this matters a lot.
Why prices keep climbing
Remote work changed the math. When you only commute to San Jose two or three days a week, 45 minutes south stops being a dealbreaker. Some people are actively choosing it for the schools, the space, the pace. That's brought new buyers into the market. Gilroy appreciated 4-6% annually over the last three years.
Downtown investment helps too. New restaurants and coffee shops opening on Monterey Road means Gilroy is becoming a place people go, not just a place people drive through on 101 to get to LA.
The honest take
Gilroy is still the most affordable city in Santa Clara County. That's real. But the gap is narrowing. A house that sells for $900K today is probably $950K in two years. That's still well below comparable homes in Morgan Hill or anywhere in Silicon Valley, but the window is getting smaller.
If you've been thinking about it, the cheapest version of Gilroy is the one that exists right now.
Sources: Santa Clara County Property Assessor Records (2026), SFAR Market Report Q1 2026, HUD FHA Loan Limits 2026, City of Gilroy Community Development Dept.