Welcome to the bay area. This is a fantastic place to live and I am sure you will love it here. First of all, you are correct that Palo Alto home prices are higher compared to other cities with larger lots and larger homes for the same price. However trust me the schools are not better, especially at the high school level in the other bay area communities. I am not saying Palo Alto schools are objectively better, but they are certainly not worse, and many people feel that the schools here are more desireable for a variety of reasons including more AP classes than anywhere else, amazing teachers, and superb actvities. That being said the houses and lots are smaller, and the town of Palo Alto is a little bit more like a city than places like Saratoga or Los Altos. There is a very vibrant downtown on University Ave and a secondary one on California Ave. There is great access to the train and and the two freeways that go to SF, 101 and 280. There is a nice amount of shopping, lots of community activities, plenty of parks, and a wonderful influence of Stanford University in the community. Los Altos Hills does have large lots, one acre minimum, but they are often steeply sloped, or overlooking a freeway. Also, the land is sometimes not stable there. Saratoga and Los Altos are similar in having generally larger lots than most of Palo Alto, but definately a more suburban feel. Hillsborough and Burlingame are other towns with great schools and are closer to SF. Portola Valley is another place where the lots are large, there are a lot of horses, a a very nice community feel. It is rural, but close in. Ladera, on the edge of Portola Valley offers 10K + square foot lots, another close community, and very easy access to 280. So, if you want a big lot, Palo Alto is not the place to be, but if you want a more urban feel and easy acces to services, plus wonderful schools than you may enjoy Palo Alto. My children loved growing up here, but if yours need more outside space then one of the other communities may be better for your family.