I'm leaving for Spain next saturday, I'll stay in Madrid for a week and expect to be in Valencia the following week (las Fallas), as Madridman said, the hotels are totally booked since 2 or 3 months ago
. A friend got me a hotel in Alfafar (a city just 4 kilometers from Valencia's downtown), the rate is really good, only 49€
for a single/double room. The name is IBIS (MM edit: Hotel URL
HERE - Accor Hotels chain) and it seems to be a new hotel. I'll post my experience after. Maybe you can look for hostals or hotels in cities around and you'll be surprised at the prices. The cities are well connected by train and subway.