Annie Tritt for The New York Times  Potential buyers are seen through the back window of an open house, which is for sale at over $1.75 million in Palo Alto, Calif. Facebook millionaires might drive up real estate prices in the already expensive area of Silicon Valley, some fear.  PALO ALTO, Calif. — Imagine looking for a house in San Francisco or one of the nicer parts of Silicon Valley, which are already among the most expensive parts of the country. Now imagine having to bid against a legion of newly minted Facebook millionaires.  “I’m kind of worried — a thousand millionaires are going to be buying houses!” Connie Cao said as she and her family toured a home in a good school district here.  Her husband, Jared Oberhaus, was more optimistic. “Maybe sellers are sitting on their houses now, waiting for Facebook, and they’ll all come on the market at the same time,” he said.  It will be some time before the first Facebook shares are sold to the public, and even longer before Facebook’s employees are able to turn their paper wealth into cash and officially take their places as the newest members of the 1 percent. But the mere anticipation of the event may pour a little kerosene onto what is already a fairly hot local real estate market.  When Ken DeLeon, a Silicon Valley real estate agent, recently sold an 8,000-square-foot house to a Facebook employee, he said, the movers showed up at the client’s old 1,000-square-foot home and asked, “Did you win the lottery?”  Silicon Valley has been good to Mr. DeLeon, a former lawyer, who said he sold $275 million worth of homes last year, and who is finishing up a memoir about overcoming illness, injury and loss that he calls “Why Do Bad Things Happen to Sexy People?”  Even after some of the air went out of the housing bubble in the Bay Area in recent years, prices in the most desirable parts of San Francisco and Silicon Valley stayed buoyant enough to remain out of reach for most people. A report on 2011 housing prices by Coldwell Banker, the real estate company, found that 8 of the nation’s 20 most expensive markets were in Silicon Valley or the Bay Area. Mr. DeLeon said Palo Alto, with its limited supply, had remained remarkably strong — and could hit new peaks this year.  In recent weeks, he said, there have been signs that the market has been heating up more: 10 homes in Palo Alto sold for more than their asking prices last month, some by large amounts. Now, with the long-expected Facebook public offering a step closer to reality, Mr. DeLeon said he expected to see several things happen: some sellers may keep their homes off the market until they judge the time is right, some speculators may snap up old houses to tear down and rebuild, and some buyers may feel pressure to make offers before the deluge hits.  A steady stream of would-be buyers walked through the open house Mr. DeLeon held here on Sunday — a 2,325-square-foot home with a small backyard and an asking price of nearly $1.8 million. They checked out the sunken Japanese-style dining room and the heated concrete floors with leaf inlays. Many got lattes from the barista stationed in the backyard.  Mr. DeLeon said he already had plans to market to Facebook employees. One strategy: he intends to buy ads on Facebook. “It’s amazing how you can target them,” he said.
The Bay Area and Silicon Valley expect the windfall from a stock offering to make their in-demand region even hotter.