It’s search engine Thursday.
Recently someone found this site by searching for: palo alto, median household income
This is actually a very tricky question.
According to City Data, the median income in Palo Alto in 2007 was $102,565.
According to Zillow, the median income in Palo Alto is $90,377.
According to the Bay Area Census, the median family income in Palo Alto in the last 12 months is $153,197 and the median household income in Palo Alto is $119,046.
Without a doubt, $153,197 is the closest number to the truth.
However, even then this is skewed because it includes all the people who don’t need to work to live in Palo Alto. For example, the neighbor of this house for sale who pays just $1370 a year in property tax. These people, who incidentally may just as likely be 21 years old, as they are 81 years old (because the low tax rate can be passed to kin), need to be discounted since let’s face it, they have no income for all intents and purposes.
Unfortunately, I have yet to find a chart that shows the distribution of income in Palo Alto. Without that, one can only assume.
So, if you exclude the income free Prop-13 enhanced people in Palo Alto, my magical calculation reveals that the median household income is close to $300,000.
Using a health Californian multiple of spending 5x (because it’s risk free) of your income on housing, that means that a median Palo Alto family can afford a $1.5 million dollar house.
And wouldn’t you know it? That’s just about the same as the median listing price according to Redfin.
Updated: Thanks to Burbed reader SanMatean for this chart: