Realtor John W. King of Alhouse King Realty thinks the question should be "Who is going to buy $2 million or more homes?" since he believes a million-dollar home is just the midrange-priced home for this area.

"The people buying these homes are just the normal buyers without big IPO stock to cash in. Right now the buyers of multimillion-dollar homes are those who have been with performing Silicon Valley companies for a number of years and have homes that they can sell in the low- to mid-million range locally," King said. "We will most likely start to see some 'instant-aires' in the next few months since the multimillion dollar market is still soft and could provide an excellent buying opportunity for them."

Although rumors circulated that Google employees were checking out open houses incognito for fear that their status would influence sellers and prices, many of the new millionaires are holding onto paper that can't be readily exchanged for cash for a down payment.

"Though Google has made a lot of new millionaires, they won't be hitting the market to shop until their stock has vested and can be sold. The first signs of this fresh bunch of buyers will be around Christmas time. This could be a great Christmas for lots of agents and Googlites," said John Leslie of Alain Pinel Realtors in Los Gatos.

Leslie reports that million-dollar homes are selling to a variety of capable buyers during what he describes as a "crazy market."

"Besides these few instant millionaires, trade-up buyers are the next largest group of home buyers in the million-dollar-home market. This year's buying frenzy was fueled by low interest rates, which allowed more buyers to buy and pushed up the prices. Homeowners wanting to move up to larger homes could sell their homes for so much more than last year. This allowed them to buy up over a million and opened up an opportunity for hundreds of homeowners to trade up."

Those home buyers purchasing homes in the $2 million and up range fall into two categories, according to Leslie: the trade-up buyers already mentioned and a smaller second group of buyers who've adjusted their investment in the stock market to the more stable real estate market.

"The second group has the luxury of having their old 2000 stock return to a saleable level that allowed a jump to expensive real estate ownership instead of the uncertainty of stock values," Leslie said. "Many of these buyers suffered the burst of the 2000 bubble and decided to not miss their next opportunity to put their stock wealth into real estate, which historically has been more stable."

Dennis Byron of Byron and Associates in Los Gatos, who is handling several relocations for Google employees, believes that the type of buyer who buys million-dollar homes hasn't changed.

"There is always a small percentage of people that are in that market. They are generally local people who are looking to move up or just change a lifestyle," Byron said. He cited the recent listing of the Tobin Clark Estate as an example and noted that most of the people seriously interested in the mansion listed for $45 million were prepared to pay cash. Several of the people who inquired about the property were from overseas and were looking for a second home. Others already had several estates in the United States.

"Do these people affect the market? Not really. In the truly high-end properties of $10 million and up, the number of people seriously looking is so small that they don't make an impact on the general market," Byron said.

According to a luxury-home-owner profile conducted by Coldwell Banker last year, business executive of a large corporation is the No. 1 profession of buyers of luxury homes, with entrepreneurs who own their own business a close second. Other top professions of buyers of million-dollar-plus homes were: doctor, banker, lawyer, stockbroker, actor, musician and inventor.

Two-thirds of these homeowners are from the "baby boomer" generation or between the ages of 35 and 55, while 28 percent are moving into luxury properties as they approach their retirement years of 56 years and older. Only 4 percent of luxury homeowners are under 34 years of age. Eighty-eight percent of luxury-home purchasers are married and 55 percent have children. About one out of 10 is single, reflecting 6 percent men and 5 percent women.

Nearly one-third of these buyers paid cash to purchase their $1 million-plus home. And, in spite of paying a big price for a beautiful home with all the amenities, 41 percent of these luxury-home buyers still plan on investing more money in the home by doing major renovations. That's partially because luxury-home buyers are looking for a certain lifestyle and want the amenities to match, including designer kitchens, media/entertainment rooms with theater-style seating, wine cellars, tennis or basketball courts, indoor pools and ballrooms or cigar rooms. Most request four- or five-bedroom homes when looking to buy a new home, and almost half buy homes in the 4,000- to 6,000-square-foot range.

It remains to be seen how the real estate market will be affected once the new paper wealth turns into cash. One thing is certain—real estate has proven to be a steady investment for building wealth over time.