Why Is Palo Alto So Expensive? (11 Reasons Why)

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Morgan Stephens

Morgan Stephens has been to 43 countries and counting, and he's never content to stay in one place for too long. Right now, he's living in South Korea, but he's always on the lookout for his next adventure.

In beautiful sunny California, Palo Alto is one area of the world that stands out above the rest. It is the home of many high-level companies and people.

It is undoubtedly one of the most expensive places to live in California or the US. But why is Palo Alto so expensive?

Why Is Palo Alto So Expensive?

1. Home To Most Sports Stars in The Nation

Sports stars from all events like to congregate with each other, making this town the home to the most sports stars in the nation.

  • Davante Adams – football
  • Matt Biondi – swimmer
  • Nick Braver – fencer
  • Phil Hellmouth – poker player
  • Jim Loscutoff – basketball

And many others. There are too many to list here, and the point is that sports stars, actors, musicians, politicians, and other rich and famous people like to live in one area.

This will keep that area a high society location that will continue attracting people like themselves. This means the rich group together, raising the prices of everything in the area in which they live.

2. Biggest Tourist Attractions in California

California is a huge tourist attraction. It is estimated that over 261 million people visited California last year as tourists. They come to see some of the most prominent tourist attractions in California.

  • Stanford University
  • Palo Alto Bayland Nature Preserve
  • Junior Museum and Zoo
  • Hoover Tower
  • Elizabeth Gamble Garden

These are just a few attractions that bring people to Palo Alto annually. Trying to get a glimpse of some rich and famous people may also be part of why people visit.

3. One of the Richest Neighborhoods in The World

If you are looking for a neighborhood with a per capita income of almost $100k and a median annual income of around $250k, you have found the right place.

Palo Alto is one of the wealthiest zip codes in the nation. The cost of living is higher than in most areas, but the annual income is much higher than the national average, which makes up for it.

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4. Headquarters of Major Corporations

Silicon Valley is one of those places that you have to see to believe. It is the home to the headquarters of many of the largest corporations in the US.

  • Tesla – A car manufacturer pushing the world to convert to electric cars and trucks.
  • Hewlett Packard – Computers and everything related to them.
  • Varian Medical Systems – Leading manufacturer of medical devices and software.
  • Aviation – Aircraft industry surrounding mechanical flight systems.
  • Cloudera – Offers Cloud systems for everyone.

Palo Alto is home to some of the brightest minds working together. Many of the companies have been created by local citizens.

5. Home Of Stanford University

Stanford University is the location of some of the most innovative people in the world. The campus has top-of-the-line educational programs for students and much more for visitors.

  • Cantor Arts Center
  • The Stanford Dish
  • University Tour
  • Stanford Shopping Center
  • The Stanford Theatre

You could easily spend a whole day visiting what Stanford has to offer. The problem is that everything in the area costs some serious cash, so you may run out of money before you run out of time.

6. Home To Nobel Prize Winners

Home To Nobel Prize Winners

The Nobel Prize is an award given to people every year. People that have made significant advancements in their fields are one of the areas that the Nobel Prize was designed to honor.

  • Physics
  • Chemistry
  • Medicine or Psychology
  • Literature
  • Economics
  • Promotion of Peace

Those who have worked hard enough to earn a Nobel Prize are some of the brightest minds in the world. By receiving this prize, they have received one of the most prestigious awards in their field of study.

7. Home Of Silicon Valley CEOs

Silicon Valley CEOs work for companies that are headquartered in Palo Alto. Those people that have worked their way to the top live lavish lives.

Lavish lives that have been centered throughout Silicon Valley. They work hard and some more, and when they have time, they play hard.

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The money they earn stays in the community, which increases the basic costs of living and the extras in life that you all love to indulge in.

8. Birthplace Of Silicon Valley

You have all heard of Silicon Valley, but not many know why it was named that in the first place. It all started back in the early 1970s when computer technology took off.

Modern processors require a silicone transistor to work, so in honor of the part that put the area on the mao, the Bay Area location was aptly named Silicon Valley.

This area has quickly risen up to be an area of the nation that is one of the most expensive places to live, work, and succeed.

9. Home Of California Wineries

When you buy a nice bottle of wine, you can expect to pay a decent amount of cash for a good brand. One of those expensive brands could have easily come from Silicon Valley.

  • La Honda Winery
  • Varner Wines
  • Woodside Vineyards
  • Domenico Wines

There are others, but these are some of the best-known vineyards in California and are all located around Palo Alto in the Silicon Valley.

10. Some Of the Best Private Schools in America

Stanford University is not the only educational institution that has received notice for its excellence in learning. There are over 32 private schools in the Palo Alto area.

  • Stratford School
  • Fusion Academy
  • Imagination Lab School
  • Bowman School
  • Castilleja School

These are just a few schools in Palo alto that have educated some brilliant students who were accepted into Stanford University, which is not an easy achievement.

Private schools are the ones you see in the local news, but there are some great public schools. Silicon Valley education is simply top-notch, educating many of the country’s leaders for tomorrow.

11. High Cost of Housing

Nothing can make an area more expensive to live in than the high costs of housing. Rent has gone up all over the country, but in Palo Alto, most of you would not be able to even pay for rent.

  • Studio Apartment – $1895 per month
  • One-Bedroom Apartment – $2515 per month
  • Two-Bedroom Apartment – $3295 per month
  • Three-Bedroom Apartment – $4498 per month
  • Four Bedroom Apartment – $6500 per month
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The cost of housing in the area is kept high by the people living there, making sure that more people like them move into the area.

Not to say that others are not welcome if they can afford the cost of living. It is simply human nature. When people with money live in an area, the landowners and businesses learn one thing fast.

If you raise the prices, everyone will still pay for a place to live or a great place to eat. As the prices in one place go up, the others will follow, creating a spike in the overall cost of living.

To learn more, you can also read our posts on why Nantucket is so expensive, why Oregon is so expensive, and why Seattle is so expensive.

Final Thoughts

Palo Alto is a city of wealth. When the community pushes to drive prices up, that is precisely what will happen. Costs of housing, shopping, and overall living will all go up to follow the lead.

The lead of the rich and famous people that have moved into the area, causing an increase in all the local prices. It boils down to everything discussed rolled into one big ball of money and success.


  • Morgan Stephens

    Morgan Stephens has been to 43 countries and counting, and he's never content to stay in one place for too long. Right now, he's living in South Korea, but he's always on the lookout for his next adventure.

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