Portola Valley has great resale value and the opinions expressed below are spot on. the commute to Dowtown Palo Alto is 10 to 15 minutes and it is a wonderful town with several different looks to offer it's residents.

Prices, however, have flattened out and is a more resilient version of the market in Los Altos Hills. Los Altos Hills, a little further south, generally is the fist of the local high-end markets to decline in value and the last to go up. The school system and resident make up of Portola Valley helps to stabilize Portola Valley's market fluctuations so the town only mildly follows that model.

As far as buying is concerned, the market right now is perfect for buyers. Rates are still low, lending hasn't tightened up more than historic norms, and buyers are on thier heels not sure what to make of it. Many in the lending industry are expecting rates to go up next year although they feel the worst of the housing slump passed in April. In conclusion, waiting may mean that it will most likely get more expensive to buy next year than this year even with moderate price declines.

Your best bet is to buy now while you can be one of few or the only offer on your new home before a lending market shift.

Kay
I would support most of the statements made below.
Portola Valley is a fabulous very desirable community with excellent schools.
The beauty of Portola Valley is that it is truely offers a country non-crowded tranquil environment while being less than 10 minutes to Stanford and Palo Alto and no more than 1/2 hour to the heart of Silicon Valley.
The weather is generally warm.
Homes are typically on 1 acre minimums but there are a few areas - Los Trancos Woods, Woodside Highlands/Wayside Road and an area near corner of Alpine and Portola Roads where you can find smaller lots and therefore lower prices.
Ladera is the "closest in" Portola Valley neighborhood and is served by the Las Lomitas District which is also outstanding.
My family lived in Portola Valley for nearly 30 years.

Up front disclaimer: I'm a Portola Valley resident and work in Palo Alto downtown.

I think PV is a great place to live. Prices have held pretty steady over the last year or two, so the resale potential is certainly there.

As for commute time, I drive down Alpine Road to Sand Hill then cut through Stanford. It takes about 10-15 minutes at commute hours because there is some traffic. Non-commute hours are faster.

To correct one error from an earlier respondant, sewer is available throughout much of PV. It seems like about half the homes that hit the market are on sewer (but I did not take a real survey to determine this) with the option to connect available to many others.

When talking about PV, you have to realize that there are several distinctly different areas you can live.

Ladera will put you closest to Palo Alto. You find a more community feel here with a community recreation area (pool, tennis, etc.) and a "neighbhorhood" feel. There is a little shopping area within easy walking distance to much of Ladera. Lots range from about 8000 sq. ft. to a half acre or more. Prices in Ladera start around $1.3M and got to about $2.5M.

Just a little further up Alpine Road, you come to central PV. This has a more country feel and atmosphere. Lots range from 1 acre to 3 acres and more. Many are zoned for horses. Residents are encourage to have more natural landscaping on their parcels. Prices here range from $2M at the low end (fixer) to $7M and up.

If you continue further up the hill, Los Trancos is another cohesive community that is a bit more eclectic than other parts of PV. Los Trancos would add about 5 minutes to your commute, though it will always be beautiful. Lots up in Los Trancos are similar to Ladera in size.

PV is also great because there are running/walking/equestrian trails in numerous locations. I regularly run and bike up in Arastradero Preserve (technically Palo Alto), which has tremendous views and an abundance of tranquility.

I don't feel like I'm doing PV justice here. Please feel free to contact me if you'd like to find out more. I've provided a pretty high level overview and would be happy to drill down on any topic you wish.

Values have held up well. Here's the median price in PV for the last years (per our local association's data).
2003: $1,534,500
2004: $1,700,000
2005: $1,855,000
2006: $1,805,000
2007: $1,925,000

Pros are nice, verdant neighborhoods, very peaceful, good long-term value, good-sized lots, and more.
Cons, just my opinion, is that most if not all of PV is on septic (not street supplied sewer).

PV has always been expensive and has held its values very well amidst all the financial shake out. If there is any time when there is "some" softness in pricing, it would be now. The Google affect to real estate went from Mountain View north to Palo Alto, Woodside, PV, Atherton, etc. So the area is expensive and will continue to be so. Depending on where in Palo Alto your job is, the commute can be 10 mins to the north end of PA or 20ish if your job is off of San Antonio Road on the southern end.
That being said - Portola Valley is gorgeous and would make a wonderful place to call home.

Yes. Portola Valley still keeping the value. There is no commute . It take 10 min car ride. no freeways.