What to Know About Living in Palo Alto, CA

What to know about living in Palo Alto, CA

Palo Alto is special, even among all of the fantastic communities around Santa Clara County of California. The city of about 68,000 residents sits in the heart of Silicon Valley, offering a vibrant downtown and beautiful tree-lined neighborhoods. On one hand, you’ve got all of the natural scenery the area is beloved for. On the other, Palo Alto’s access to world-class tech companies and Stanford University very sought after. 

Instead of cruising all over the Bay Area for entertainment (and parking spaces), Palo Alto residents can tap into lots of options in minutes. Los Altos, Mountain View, and many other communities are minutes away from Palo Alto. Craftsman homes tend to cover the residential areas, with restaurants, retail, and tech campuses closer to the city center.

With the most current data available, we'll give a detailed summary of what it's like living in Palo Alto CA. You’ll be almost as well-versed as a local in a few minutes.

 Commercial properties and business in Palo Alto - photo via Canva

Where is Palo Alto, CA?

Palo Alto is in the northwest part of Santa Clara County in the San Francisco Bay Area. If you're looking for this city on a map, you’ll see it at the southern part of the San Francisco Bay. Palo Alto is about 35 miles southeest of San Francisco and 14 miles northwest of San Jose.

The city is bordered by Los Altos to the south, Mountain View to the east, and Menlo Park to the north. Stanford University occupies a large unincorporated area to the southwest, though most Palo Alto wraps around the campus on most sides.

Highway 101 runs along Palo Alto's eastern edge close to the bay, offering easy access up and down the peninsula. The Palo Alto Caltrain station provides frequent service to San Francisco and San Jose. The 280 Freeway and Foothill Expressway also move traffic towards San Francisco or Central San Jose.

Is Palo Alto Growing?

In terms of population, the number of people living in Palo Alto has remained relatively stable in recent years. The population was 68,572 in 2020, a slight increase from 64,403 in 2010. This reflects Palo Alto's built-out nature and slow-growth policies. Higher housing prices compared to surrounding cities is probably another factor keeping population growth nominal. 

Despite expensive homes, job growth and incomes have risen sharply in Palo Alto, driven by the tech economy all around the city. Palo Alto became a fantastic option because of its excellent schools, neighborhoods, and access to high-paying jobs.

What Should You Know About Palo Alto, CA?

The Ohlone people were the earliest known inhabitants of the land on which Palo Alto now sits. But in 1769 when Don Gaspar de Portolá noted an area with tall redwoods along San Francisquito Creek, he used the term "palo alto" (tall stick). This area mixed with part of Rancho Rinconada del Arroyo de San Francisquito in 1841.

Stanford University opened up in 1891 with a student base of 465, establishing Palo Alto as a college town. The nearby university influences the city's economy and culture even to this day. Countless startups, tech businesses, and other entrepreneurial pursuits have emerged from Stanford and the local area.

Hewlett-Packard and Lockheed established a presence in Palo Alto in the 40s and 60s, along with several other industry leaders. They eventually spread to surrounding cities and across the globe. But Palo Alto's modern standing at the helm of Silicon Valley really started in the 1990s internet boom. Reviered company names like PayPal, Google, and Facebook got their start here and took their businesses worldwide.

Today, Palo Alto gives dynamic employment landscape to residents, who live in the charming downtown, peaceful outer neighborhoods, and get access to a world-class university. Check out the Palo Alto History Museum to learn the rest of this city’s history.

What is the Palo Alto Cost of Living?

As one of the most desirable places to live in the Bay Area and the country, Palo Alto has an extremely high cost of living.

Approximate Palo Alto CA cost of living according to PayScale.com:

  • Housing costs: 48% higher than the national average
  • Utilities: 26% higher than the national average  
  • Groceries: 43% higher than the national average
  • Transportation: 24% higher than the national average

The biggest factor is housing costs, which are astronomical in Palo Alto. The median home price is over $3 million, (about $2.9 million in April 2024) make high-income a commanility among residents. Rents are also very high, as you would expect.

Utilities, food, and transportation costs are closer to the norms we see across thel Bay Area, though these averages are still above national norms. Locals looking to save on living expenses find cheaper ways to get around, like ride-sharing apps, public transportation, and bicycles.

A view of a street in Palo Alto - photo via Canva

What's the Palo Alto Job Market Like?

Palo Alto maintains one of the strongest job markets in America, thanks to its strategic location in Silicon Valley. Tesla, Hewlett-Packard, and VMware have their headquarters here, plus many startups and venture capital firms. A lot of the capital they generate has a trickle down effect on Palo Alto. 

Nearby, Standford University has a sizeable workforce of over 18,000 staff according to Fall 2023 numbers. Stanford Healthcare has over 3,000 employees, with a wide range of skillsets. A large percentage of these workforces will reside in Palo Alto. 

The total number of workers in Palo Alto across all industries is a tricky number to pin down, but some data puts the total at 34,561 in January 2024. The unemployment is 3.6% according to the same data.

The largest industries in the southern Bay Area city are professional, scientific & technical services, healthcare, and education. 

Despite tech company layoffs that we’ve all been hearing about to start 2024, the South Bay job market added 5,000 jobs in January 2024 - accounting for most of the jobs added across the Bay Area. Even though growth estimates for 2023 were not met, there are plenty of high-paying opportunities for skilled tech workers, healthcare professionals, and academics.

In 2021, the median household income in Palo Alto was $174,003, more than double the national median of $70,784. However, income inequality is also high, with many service workers struggling to make ends meet.

What's the Palo Alto Real Estate Market Like?

Palo Alto is not a cheapest place in Santa Clara County to buy a home, but most residents are willing to spend more for the lifestyle on offer. The median home price for our Palo Alto listings was $2.9 million as of April 2024, quite a bit higher than many Bay Area zip codes. Other real estate companies put the median sale price at $3.4 million and show a 7.4% increase year-over-year in March 2024.

Most of the residential real estate in Palo Alto is single-family houses, many in the Craftsman or Mediterranean styles. Neighborhoods have the quintessential tree-lined streets and well-maintained older homes that many buyers love the idea of settling down in. Townhouses and condos are an option too, for those looking for stepping stones before full-on home ownership.

A home in Palo Alto - photo via Canva

Palo Alto's most desirable neighborhoods include Old Palo Alto, Crescent Park, Professorville, and Duveneck/St Francis. More affordable options can sometimes be found in Midtown, Ventura, and Barron Park. But "affordable" is relative - even fixers may cost seven figures.

Rents are also extremely high in Palo Alto. As of May 2023, the average rent for a one-bedroom apartment was $3,225, a two-bedroom was $4,050, and a three-bedroom was $5,300. 

The Palo Alto real estate market heavily favors sellers, just like most markets in this area. Homes frequently sell quickly with multiple offers over asking price. Palo Alto appears to be getting a large number of new residents from New York and Santa Barbara, but also draws international immigration, thanks to Silicon Valley. 

What Are the Best Places to Live in Palo Alto?

Some of the most desirable neighborhoods in Palo Alto include:

Old Palo Alto: One of the most prestigious neighborhoods in Palo Alto (as the name might suggest), with stately homes on spacious plots of land, ancient trees, and minutes away from Stanford. As you’d expect, this kind of setup attracts many affluent homeowners.

Crescent Park: This community is close to central Palo Alto and is bordered on the north by the San Francisco Creek. It’s a charming neighborhood known for 1930s-era homes, peaceful streets, and Gamble Garden. Borders the San Francisquito Creek.

Professorville: This is a historic spot near downtown Palo Alto with a range of well-maintained Victorian and Craftsman homes. Apparently, the area is popular with Stanford professors.

Duveneck/St Francis: Family-friendly neighborhood with excellent schools, parks, and a strong sense of community. Mostly ranch-style homes.

Downtown North: This area is close to University Avenue and filled with several Victorian homes, newer townhouses and condominiums. One nice thing about Downtown North is the walkability and on-hand dining and shopping.

Community Center: Convenient central neighborhood near shopping, parks, and the Palo Alto Art Center. Mostly 1950s ranch homes.

What is There to Do in Palo Alto?

Palo Alto has entertainment and things to do for all ages, both inside the city and outside in surrounding cities. Getting to Downtown San Jose is just a brief trip in the car or Uber/Lift, depending on your plans. Day trips to the Santa Cruz beaches is another option for those with room in their schedule. 

In Palo Alto, the locals can choose from cultural attractions, recreation in many forms, world class dining, and shopping. Wineries are a lovely option for weekends too. Neely Wine, Thomas Fogarty, and Portola Vineyards are nearby, but not inside Palo Alto.

Some other highlights include:

  • Exploring the Stanford University lands, which include the Cantor Arts Center, Rodin Sculpture Garden, and Hoover Tower (home of the Hoover Library and Archives).
  • Shopping and sampling foods along University Avenue downtown, home of excellent poke bowls, streetside dining, and any other retail desires you might have. The Stanford Shopping Center is here too, with its own range of shopping options.
  • The Stanford Theatre or Palo Alto Players is a great spot to catch movies and local productions.
  • The Palo Alto Art Center, Palo Alto History Museum, and Museum of American Heritage are great places to take in history or the arts.
  • Smell the flowers of Gamble Garden and go for a beautiful stroll or hike through the nearby Baylands Nature Preserve, but bring some water for those hot sunny days!
  • Enjoy Rinconada Park, Mitchell Park, or Foothills Park. All three would be great for picnics, kicking a soccer ball around, or whatever you and your family find fun.
  • Biking or running on the Baylands trails or the Stanford Dish loop (shown below).
  • Younger family members will love the Palo Alto Junior Museum & Zoo or ice skating at the Winter Lodge.
  • Order tasty dishes at acclaimed restaurants like Zola, Evvia Estiatorio, Protégé, and Tamarine.

The Stanford Dish - photo via Canva

Palo Alto also hosts many cultural events throughout the year:

  • Palo Alto Festival of the Arts.
  • Palo Alto World Music Day.
  • Palo Alto Clay & Glass Festival. 
  • The Palo Alto Farmers' Market (every Saturday all year long).

What is Near Palo Alto?

Palo Alto is quite literally in the heart of Silicon Valley, so the locals get easy access to tech companies and other employers, plus other cities around the Bay Area. Some nearby communities include:

  • Stanford is less than 1 mile away - The Stanford University campus borders Palo Alto
  • Menlo Park is 2 miles away and is home to Facebook/Meta headquarters
  • Mountain View is less than 6 miles away and is home to Google, LinkedIn, Intuit, and NASA Ames (a major research center for the space agency). 
  • Cupertino is about 12 miles away and is home to the unique Apple headquarters.
  • San Jose is about 17 miles away from Palo Alto and is the largest city in the Bay Area and capital of Silicon Valley.
  • San Francisco is 35 miles north or Palo Alto and is the well-known cultural and commercial center of the area.
  • Santa Cruz is a beautiful area just 43 miles away that will give vacation feelings without the travel time. The city is known for its beaches, high quality surfing, and seaside vibes.

You can either drive yourself around to these destinations or make use of public transportation. 

The Palo Alto Caltrain station and the Palo Alto Transit Center might not get you to the doorstep of your destination, but close enough, while saving money. 

Living in Palo Alto, CA

Are you still wondering what is it like living in Palo Alto?

You know more about Palo Alto from reading this guide, but you could ask a Palo Alto realtor some more specific questions. If you want a walkthrough of a day in the life of a local, they’ll paint the picture. 

While the cost of living is higher than the national average, Palo Alto still attracts new residents because of top-notch schools, peaceful neighborhoods, and employment opportunities. The dining, wineries, and shopping play a role too.

If you’d like to learn about our Buyer Satisfaction Guarantee, which will basically insure your approval of your new home for 18 months, fill out our short contact form.

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