Beware the bubble.
Most of the pressure is coming from Chinese Money. Hot money is fleeing Chinas real estate bubble for something more secure. Its flooded into Toronto, Vancouver, Vegas, anywhere in California, particularly places with good public schools and universities.
However beware. The rush to purchase may push these prices higher, and they will stay high so long as the bubble continues pushed higher and higher. But at the end of the day prices can only be sustained by the local economy, and taking Palo Alto, that would be lower than they are now. Scarcity aside, it is way better to rent in Palo Alto than buy, so that prices will soon come down.
Prices in Vancouver is starting to tumble down, off 11 percent from last year as the Chinese moved down the coast to places like Palo Alto
This is a huge issue, but some silly liberal philosophy means that we are not allowed to talk about it! We are supposed to welcome all immigrants and not mention the destabilizing influence of hot mony parked in our real estate.