A common question is: which is the best Palo Alto neighborhood to buy a house in, and which is the worst? Look at the graph below. From a historical perspective, you might think the expensive Palo Alto Hills neighborhood is not a good choice. The average price per sq. ft. in the city of Palo Alto was below that in Palo Alto Hills for most of the time from 1998 through 2005. Since 2008, the Palo Alto Hills price has remained below the Palo Alto price. This doesn’t necessarily foretell the future. Palo Alto Hills may currently be a bargain luxury location. It is extremely unlikely that any high-density or “affordable” housing will be built in the Palo Alto Hills neighborhood. The main access to the area is the narrow, winding Page Mill Road, which can not support significantly more traffic. Palo Alto Hills could become even more exclusive than other areas, such as Atherton, because building any significant amount of housing to meet state-mandated housing requirements is very impractical.
Two other top-priced Palo Alto neighborhoods, Crescent Park and Old Palo Alto, show a narrowing of the gap in house prices relative to city prices, but not an actual crossing of paths.
There is no Palo Alto neighborhood that has had significantly more price growth than the city itself. If you look through all of the house price graphs provided for Palo Alto neighborhoods on JulianaLee.com, what stands out is how closely all of the neighborhoods track the citywide statistics. The prices may differ noticeably, but the plots follow parallel paths, indicating that the percentage growth is nearly the same (log scale used on the y-axis).