Specialist police teams turned up at the address in Hockley – just yards from where Masood had previously lived - on Saturday lunchtime.
Masood, 52, from Birmingham, had until the end of 2016 lived in Quayside, less than 200 yards away.
Shocked neighbours told reporters that friends of the attacker lived at the maisonette and revealed Masood would often visit to take their children to a local mosque.
Speaking with her mother alongside her, a girl living next door to the house said she had met Masood and said he had "seemed kind, normal".
She said Masood's two children had gone to her school, nearby Brookfields Primary School.
The neighbour added: "A couple live there with their four children, they are a nice family.
"I saw the man from London visiting here. My little sister was in his son's class. They left last year, to go to London - before the holidays.
"His children used to visit next door and he (Masood) used to pick them up, sometimes. Sometimes he used to come here and pick up their two girls to take them to mosque."
The neighbours said they had not seen Masood or his children since his family left before Christmas.
On Sunday, specialist police search teams were still at Bredon Croft removing bags of evidence, while an unmarked van and a West Midlands Police van were parked close by.
A woman, thought to be a plain clothes police officer, answered the door to reporters and said: "This is a scene."
Meanwhile, a 58-year-old arrested in Birmingham remains in custody after a hunt for accomplices saw 11 people held after raids across the country.
One of the mothers at the primary school said her daughter was best friends with Masood's, but added "I always got the chills from him".
Sabrina Hussain described how she changed her mind about taking her child, nine-year-old Skye, to his daughter's birthday party just before Christmas.
Ms Hussain, 28, said: "I thought I was being a bit over-protective, but then I just thought 'no I can't let her go' and we turned the car around and I made up an excuse saying the party had been cancelled.
"I just didn't want her to go. There was just something about him that wasn't right."
Ms Hussain, from Hockley, added: "He would never meet me eye-to-eye, even though mine and his daughter were best friends.
"He would speak to the other Muslim dads at the school, but not the women. I always got the chills from him to be honest - I never felt comfortable around him.
"Then, one day my daughter came home crying and told me her best friend was moving away to London because her nan was sick."
She only saw Masood's children's mother "once or twice", describing "a black woman who wore full Islamic dress".
Masood killed three people when he drove into crowds of pedestrians on Westminster Bridge on Wednesday.
He then launched a knife attack on Pc Palmer - a serving officer standing guard at the Palace gates.
Masood was then shot down by armed police. He later died.
Metropolitan Police officers revealed on Saturday that Masood is believed to have acted alone in his attack, which lasted just 82 seconds.