OK! First of all I'd like to congratulate you for wanting to better understand the variables and the causes of them when looking to invest $2mil+ in a home!
As is often the case, deeper analysis can reveal more reasons for the variances than a cursory analysis or a opinion. I like to say "everyone has an opinion... show me the facts please". You wouldn't respect, hire or feel comfortable with a surgeon that wanted to do heart surgery and did run lab rest, take image scans, etc... to as much as possible understand "what's up!".
I've begun to do some analysis for you in order to answer your questions and perhaps some factors that hadn't been considered. That analysis is summarized in this google doc "My Drive" spreadsheet which you should be able to access by clicking here https://docs.google.com/spreadsheet/ccc?key=0AjiHoKj4ywq7dF9
if not, email me Stu@StuCarson.com and I will send you a pdf version.
It shows the Elementary/Middle/High Schools for the two properties you've asked about as well as several others currently on the market in the same price range. It also shows for each property the $'s per sqft, the age, # of bedrooms and tries to high light aspects of the each property that typically impact market value positively or negatively, like being on a busy street or lot size. I included in the analysis several other homes currently on the market in the same price range and similar size.
In summary, 424 Homer is the ONLY property where the children of that address would attend Palo Alto H.S. instead of Menlo Atherton. PA High is nearly 100 points higher scoring on the API score for their average student at an amazing 905 making that one of the top public high schools in the Bay Area. That combined with the possibility that the second 2bd 1bth unit on the home might be part of the reason why the owners initially thought they could get more for the home. If that unit could be as they suggested in their marketing rezoned to be a permitted rental unit/second dwelling it would increase the value.
Regardless as you will see in the spreadsheet analysis they are now priced appropriately for the size of the home, condition, school district and having an "in-law" unit.
2025 Santa Cruz is a very interesting home. New construction, therefore modern architecture, utilities, etc... and yet one of the lowest costs per sqft.
I'd be happy to do more analysis, on these and other properties for you. I can also assign one of our "Luxury and Country Team", Buyer Specialists to you. They will research the market daily until together we find THE right home for you. Then I can assure you, I personally will negotiate the best possible price & terms for your purchase, treating every $ as if it were my own.
Hire the Best! The right Realtor can make all the difference.
"Luxury and Country" Team Leader
Keller Williams Realty