As a Willow Glen RE Specialist, I would say that it's possible. You will not be able to find a perfect home. With a $320K purchase price you will be buying a single family home in pretty rough shape. You may be able to find an older townhome/condo in basic shape. You may want to consider the neighboring areas such as Cambrian, Rosemary Gardens, North SJ. Again, the house you purchase for under $350K will not be in move-in condition, or in the best area of WG.
Your price range has a number of options to consider. Willow Glen is a great choice, great walk scores and cool downtown village feel. I added a link below to show you the choices you do have there.
Although not your SFH 'single family home' option, you can make compromises to still take advantage of the area.
Blossom Valley is the area Terri and Erica are speaking of which offers a different experience.
Compare both options and decide which compromises are the best choice for you!
As far as single family home the choices are few and mostly fixer uppers on the East border of Willow Glen (east of 87).
There are several condos options. Alma Terrace - walking distance to downtown Willow Glen.
There are several options in the Oak Hill complexes. Most are short sales but the prices continue to come down and these are newer. Unfortunately, the neighborhood sits on the hill above the cemetery and some buyers do not like the location.
Another option would be Hamilton Place. Border of Willow Glen but also near the Los Gatos Creek trail, downtown Campbell and the Pruneyard. There are several units available here.
The price range really restricts what you are able to afford but as others have mentioned there are options in other neighborhoods. I would also look at some of the units downtown and along The Alameda.
Also as you move out towards Auto Mall Parkway in 95123 you are moving into more affordable areas.
And, you can get a nice townhouse at your price point. The first step would be to get a good loan approval because most sellers would prefer 20 percent down. So you need a very strong loan officer who will call the listing agent on your behalf and vouch for you.
Keller Williams Silicon Valley