A small city holding a lot of powerful people, including some of the most elite tech minds in the world, may be seeing its most expensive market ever. If you’re planning on buying a home in Palo Alto, you might want to wait until the market cools down as a studio apartment is currently listed well over $1 million.
Bloomberg reported Tuesday that thanks to “runaway real estate costs” in California’s Silicon Valley, many middle-class homeowners and prospective buyers have been priced out of Palo Alto. Even those who report higher incomes are having a difficult time finding affordable housing.
Bloomberg attributed much of the high cost of housing to high employment in the area and a limited housing supply.
The issue comes to light after the Palo Alto planning commissioner resigned, stating in a letter to the City Council members and Palo Alto residents that she could no longer afford to live in her rented home. Kate Vershov Downing is an attorney and her husband is a software engineer.
In her letter, according to SF Curbed, Downing relayed that her family would be moving to Santa Cruz, the beach town south of the area: “My family has decided to move to Santa Cruz. After many years of trying to make it work in Palo Alto, my husband and I cannot see a way to stay in Palo Alto and raise a family here. We rent our current home with another couple for $6,200 a month; if we wanted to buy the same home and share it with children and not roommates, it would cost $2.7M and our monthly payment would be $12, 177 a month in mortgage, taxes, and insurance,” Downing had written in her Aug. 10 resignation letter.
According to real estate company and brokerage service Redfin, many homes in the Palo Alto area are listed for at least $1 million.
Bloomberg reported that Zillow data showed that the median home value has doubled in Palo Alto since 2006, raising it to $2.5 million. In one instance, a 790-square-foot studio is listed for about $1.3 million.
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