If you've been thinking about buying a home in the Bay Area but watching San Jose prices make you dizzy, let us introduce you to Gilroy. The median home price here is sitting around $900,000—which sounds like a lot until you realize it's nearly $350,000 less than what you'd pay just 30 miles north in San Jose. In a county where $2+ million buys you a modest house in Cupertino or Los Gatos, Gilroy has become something almost extinct: an entry point for Bay Area first-time buyers.
We get asked all the time: Is it a good time to buy in Gilroy right now? The answer is more nuanced than it was five years ago, but the fundamentals still work in Gilroy's favor—especially if you're willing to think strategically about which neighborhoods to look at.
Where the Real Money Is Going
The newest action is happening in Glen Loma Ranch, the master-planned community on the west side of town. It's got that new-development energy: modern architecture, community pools, playgrounds, the whole package. If you're buying here, expect to spend $950,000 to $1.2+ million depending on square footage and finishes. The trade-off? You get HOA fees (typically $150–250/month) and something called Mello-Roos—special assessment taxes that can run $3,000 to $5,000 per year on top of your property taxes. It feels like a lot until you remember that's still less than the down payment difference between here and Los Gatos.
Eagle Ridge is another solid newer development with similar pricing and similar tradeoffs. Both communities draw families who want new construction, predictable maintenance, and that "moved-in-yesterday" feel.
But if you want to buy into something with more character—and potentially better long-term appreciation—look at Old Gilroy. This is the heart of town, where you'll find Victorians and Craftsman bungalows, many of them 80+ years old. Prices here range from $750,000 to $1.1 million depending on condition and lot size. The neighborhood has been getting real attention in the past few years thanks to downtown revitalization efforts, street improvements, and new restaurants opening up. Locals who bought here a decade ago for $600,000 are sitting pretty. The bones of these older homes are solid—thick plaster, real hardwood, built when things were made to last—and plenty of buyers are choosing character over new construction.
The east side of Gilroy tends to have larger lots—we're talking a quarter-acre or more on typical properties—which appeals to people who want space for gardens, chickens, or just room to breathe. Prices are generally $850,000 to $950,000, and you'll find a mix of ranch-style homes and some older properties that are ripe for renovation.
Financing: FHA Loans Actually Work Here
Here's something that surprises a lot of people: FHA loan limits cover almost all homes in Gilroy. The current FHA limit in Santa Clara County is $829,000 for a single-family home, which means most Gilroy properties fall within reach if you can put down 3.5%. Some lenders will go higher with compensating factors (good credit, stable income, lower debt ratio). Compare that to San Jose or Palo Alto, where FHA loans barely touch the market. If you're a first-time buyer or don't have a massive down payment saved, this matters.
What's Pushing Prices Up
Remote and hybrid work changed everything. Five years ago, the idea of commuting 45 minutes to San Jose was a deal-breaker for most people. Now? With two or three days in the office, it's manageable. Some people are actually choosing it—better schools, more space, a quieter pace. That's brought new buyers south, and prices have reflected it. Gilroy homes appreciated roughly 4% to 6% annually over the past three years, which is solid if not spectacular compared to some markets.
The downtown investment is real too. New restaurants, coffee shops, and improved streetscaping mean the community is becoming a destination, not just a place you drive through on the 101 to get to LA. That matters for both lifestyle and resale value.
What's Next?
The honest truth: Gilroy's affordability relative to the rest of the county is one of its biggest selling points, and as word spreads, that advantage gets thinner. Prices are climbing. A home that sells for $900,000 today might push $950,000 or higher in two years. That doesn't mean prices are going crazy—$950,000 is still way below comparable homes in Morgan Hill or Silicon Valley—but the margin is narrowing.
If you've been on the fence about South Valley, waiting to see where interest rates go or when "the market settles," remember this: the most affordable Gilroy that exists is the one available right now. Next year's prices probably won't be as friendly.
Want to stay on top of housing trends and neighborhood updates in Gilroy and Morgan Hill? Subscribe to South Valley Spotlight at southvalleyspotlight.com and get the story on our community every week.
Sources
Santa Clara County Assessor Property Records (2026) · SFAR (San Francisco Association of REALTORS) Market Report, Q1 2026 · HUD FHA Loan Limits, Santa Clara County, 2026 · City of Gilroy Community Development Department