Silicon Valley's Boom Creates Shortage of $1 Million Homes

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Brokers say tech growth is the main driver of demand in Silicon Valley. But they say it's not coming from the new crop of high-profile social-media tycoons. Instead, it's coming from executives at Apple, Google and other more established companies.

"Everyone was waiting for the big Facebook effect," said Bill Lewis, a vice president in the Los Altos office of Alain Pinel, the Silicon Valley Realtor.

Another big force behind demand is China. Realtors say waves of wealthy Chinese buyers are pouring into the Valley and buying up multi-million-dollar properties. They say the buyers are increasingly nervous about the Chinese government and economy and are looking for a safe haven.

All that demand and lack of inventory means that $1 million doesn't buy much luxury in Silicon Valley. A 1,700-square-foot home in Los Altos, with dated fixtures and "lots of upside potential," is priced at $1.3 million, according to one listing.