Facebook IPO drives up Calif. real estate prices

Home for sale in Silicon Valley, Calif.

(CBS News) Imagine looking for a house in San Francisco or one of the nicer parts of Silicon Valley, already among the most expensive parts of the country. Now imagine having to bid against a legion of newly minted Facebook millionaires.

The anticipation of the Facebook initial public offering (IPO) has already has driven up prices in Silicon Valley's real estate market. And as potential buyers flock to an open houses in the area, they are met at the door with the bad news: someone else beat them to it.

Here, when people talk about the housing crisis, they mean the battle between buyers that's driving up prices.

Patricia He has been house hunting for months. She has made several offers at hundreds of thousands above the asking price.

"And so far, we haven't gotten anything," she said. "I did not expect the prices to go up so much, so fast, in such a short period of time."

Ken Deleon, a real estate agent in Silicon Valley, says it's partly the promise that Facebook will produce a new crop of millionaires when it starts selling shares to the public.

"Literally, February 1, when Facebook filed for the IPO is when things really started jumping," Deleon said.

Realtor Marcy Moyer says it's not just Facebook, though.

"We've got Google, Apple, Linked-In, Facebook, Groupon, you know, and on, and on, and on," Moyer said.

She says that means this is not a housing bubble.

"There's nothing artificial about it. People have the money."

To see John Blackstone's full report, click on the video in the player above.

  • John Blackstone
    John Blackstone

    From his base in San Francisco, CBS News correspondent John Blackstone covers breaking stories throughout the West. That often means he is on the scene of wildfires, earthquakes, floods, hurricanes and rumbling volcanoes. He also reports on the high-tech industry in Silicon Valley and on social and economic trends that frequently begin in the West.