SILICON VALLEY RESURGENCE BLOWS ROOF OFF HOUSE PRICES.

Byline: Catalina Ortiz Associated Press 

Robert Andrews did well for himself when Netscape Communication Corp. went public, and he put some of his windfall into a $300,000 weekend house.

He plans to spend $40,000 more on improvements, such as removing a wall or two to give it an airier, contemporary feeling and remodeling the kitchen with granite counters and bleached-oak cabinets.

``This house was kind of my pressure release for being in an extremely high-pressure position,'' said Andrews, a 39-year-old Netscape director and manager of its Web site.

With an explosion of start-up companies and public offerings, Silicon Valley's high-tech industry is undergoing a boom that is driving up demand for housing.

The result is ballooning home prices and apartment rents, some of the highest in the nation.

``I have never seen it like this,'' said John Pinto, a San Jose real estate broker for 23 years. ``Vacancy means the period from 2 in the afternoon when one guy is moving out and 5 when a new guy moves in.''

Silicon Valley has boomed before, notably in the early 1980s, when the personal computer caught on with businesses. A slump came later in the decade, and thousands were laid off.

The current surge started about 18 months ago, driven in part by the phenomenal rise of the Internet and other technology that promises to make computing easier and indispensable.

Silicon Valley's economy is growing at an annual rate of about 5 percent, the fastest of any region in the country except Las Vegas, said Stephen Levy, director of the Center for the Continuing Study of the California Economy.

Getting the most attention are new companies that have gone public, turning their founders into millionaires overnight. The best known of these has been Netscape, maker of the most popular browser for navigating the Internet.

But it's not just top executives who are making good money and enjoying it.

``Engineers out of college going into Apple and Intel and National are getting 60 grand a year. Product managers are starting at 90 grand,'' said industry analyst Tim Bajarin.

Andrews would not give his salary or say how much he gained from Netscape's stock offering. But his Discovery Bay home could be called modest by Silicon Valley standards.

It's not unusual for buyers of Silicon Valley's pricey homes to pay hundreds of thousands of dollars more to remodel them extensively, installing luxurious kitchens with professional-grade appliances and enough granite for a bank lobby.

Also common are houses bought primarily for their location and then gutted for renovations or even torn down and replaced.

Silicon Valley has had the fastest-rising home prices in California, according to the California Association of Realtors.

The median price of a single-family home in Santa Clara County, the core of Silicon Valley, was $271,320 in September, up 3.8 percent from a year earlier.

The median home price in Atherton in August was $1 million, up nearly 24 percent from a year ago. One real estate agent's recent listings for Atherton included houses at $2.9 million and $3.8 million.

Neighboring Woodside's median house price jumped from $735,000 in August to $960,000 in September, 86 percent higher than a year earlier.

Apartment rents are high, too. John Mannion, a manager at Cadence Design Systems, which makes chip-design software, considers his new two-bedroom apartment in Redwood Shores a bargain at nearly $1,700 a month.

``The ones in Palo Alto were $2,500. A one-bedroom hovel in Mountain View was $1,600,'' he said. ``Rents are so high, everyone makes the argument that you should buy.''

Of course, Silicon Valley has its problems. In addition to high housing prices, its highways are more congested than those of any other region except Los Angeles.

And while Santa Clara County had a 3.7 percent unemployment rate in September, one of the lowest in the state, increasing numbers of workers are temporary employees without pensions or insurance.

Some, however, see the road leading upward for at least a few more years because of the rise of technology that is blurring the distinctions of computers, telephones and televisions.

The emergence of the Internet ``means the market for computing technology will now climb into the billions of people, because people can now communicate and be entertained and learn, rather than just write letters and calculate spreadsheets,'' said Joe Firmage, the 25-year-old founder of USWeb Corp., which provides Internet services for businesses.

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Photo: (1-2) Tom Breeden frames the roof of a house near the Silver Valley Country Club in San Jose. The Silicon Valley housing market is booming.

Associated Press