Palo Alto homeowners who want to downsize face two challenges: finding a smaller home in the city and avoiding a steep increase in property taxes when they sell. In the past 12 months ending Sept. 30, about 414 single-family homes in Palo Alto sold through the regional multiple listing service, according to closed-sale records from MLSListings. The Census Bureau estimates that the city has about 16,800 detached houses. That means roughly one out of every 40 detached homes in Palo Alto sells each year.
