Fresno! Stockton! The Central Valley. But that's kind of a long commute. Most home buyers would like to buy in the cities of Santa Cruz or Capitola, or other mid-county areas such as Soquel, Live Oak, and Aptos. And because everyone wants to buy there, properties are relatively expensive in those areas.
Many affordable properties are to be found in the San Lorenzo Valley: Felton, Ben Lomond, Brookdale, and Boulder Creek. People tend to think of these places as being remote. Boulder Creek is the farthest out, but it's only about 20-25 minutes to Santa Cruz - and only 35-45 minutes away from San Jose. Felton is the closest "to town" - just minutes away from Ocean Street in Santa Cruz via Graham Hill Road, or River Street in Santa Cruz via Highway 9. It's also very close to Scotts Valley (and then to Highway 17) via Mount Hermon Road. It's not as far away as you might think, and it deserves serious consideration for first time or low income buyers.
Watsonville is another affordable area in Santa Cruz County. There are many grand old houses there, and it's got a lovely town square. The land surrounding Watsonville is beautiful, abounding with meadows, lakes, rivers, and creeks. It's also the growth area for the future of Santa Cruz, since it's the only area in the county with lots of flat land. But the city of Watsonville is determined not to be a bedroom community. With the increase in housing will come additional office, retail, and light industrial space (i.e., jobs). Expect property in Watsonville to experience handsome increases in value down the road.
Right across the Pajaro river from Watsonville is North Monterey County: Prunedale, Royal Oaks, Moss Landing, etc. These areas have many affordable properties, many of them just a few low-traffic miles south. This area deserves your consideration as well.