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To: fedhead who wrote (99938)	4/11/2000 6:24:00 PM
From: Robert Rose	Read Replies (2) \| Respond to of 164684

<Do you think if NAZDAQ were to fall to 3000, the Bay Area real estate prices would fall ? I have friends building custom made houses in Saratoga based on their options in internet stocks. (Their ption prices are set at much lower levels) I wonder if these houses get sold now. > I do believe Silicon Valley real estate prices are a prime example of the wealth effect, which is why I've been mentioning data points in that regard on this thread. I mean, good god, closing prices 30% above asking prices in P.A. in March?? That stat alone sets the stage for this current stock market pullback. I don't know the Saratoga market as well as my own, so I'll speak about my own first. During the bottom of the Bay Area real estate market in the mid 90's, prices in P.A. dropped just 10% from their high, versus up to 30% in many parts of CA. (I would guess that Saratoga being a little less frenzied of a market might have pulled back 15% then. So let's assume that March does prove to be some sort of ST or IT peak for Silicon Valley real estate. Given the current craziness, a somewhat steeper price decline this time around might be possible - say, 15% in P.A. and 20% in Saratoga. I don't think the problem will be unsold houses, as much as price declines. If your friends can still make money selling their houses for 20% less, they should be fine. Note: Such declines can take 6 months to a few years to develop, which should give your friends enough time to adjust their building strategies to take account of new market realities. Caveat: Just my conjectures here. Take them with a block of salt. Rob

To: fedhead who wrote (99938)	4/12/2000 3:05:00 PM
From: Ingenious	Read Replies (1) \| Respond to of 164684

Real estate prices in Palo Alto remain extremely strong over the past several months. I have been watching the overbidding spiral out of control. In general, the price range and overbids I have seen: 1. $930 asking; $1.4M sale price - 4/2 about alma x channing 2. $750 asking; $1.15M sale - several different 4/2 Eichlers in mid town PA 3. $1.5M asking $2.5M sale lower crescent park 4. $5.5M new construction on lincoln x martin 3400 sq. ft on 10K ft. lot upper crescent park - (crescent park is right near university and 101 freeway.) 5. $4.4M remodel project on old victorian in crescent park. Several other properties in Old PA with $1M overbids. These are sales occuring from Dec. to April. With overbids these high and not much inventory, it is unlikely that PA will see anything less than houses selling for their asking price even with a nasdaq downturn.