SAN FRANCISCO (KGO) — IPOs, or initial public offerings, are expected this year for major tech companies which could leave employees of those companies flush with cash to spend on a house.
In San Francisco, thousands of young people are on the verge of becoming instant millionaires and buying into the housing market and driving it up.
People covet living in the city by the bay. It’s expensive now. Very expensive. But buckle up for a ride up on the backs of IPOs. In the next year, major tech companies like Airbnb, Uber, Lyft and Pinterest are expected to go public with a total market capitalization of around $200 billion. And many of those employees have an equity stake in those companies.
Deniz Kahramaner is a real estate agent with Compass and a data analytics expert.
“If all the rumored IPOs happened we will see in the order of thousands of new millionaires.”
Kahramaner crunched the numbers on what might happen when they start buying single-family homes.
“We probably expect a 50 to 100-percent increase in home prices the next five to 10 years, specifically in San Francisco for single-family homes. ”
Herman Chan, with Sotheby’s International Realty, said, “Allegedly were going to have a bunch of newly minted millionaires overnight coming from the five or six IPOs happening so it remains to be seen, but no one can tell me that won’t affect the housing.”
Some sellers are even pulling their homes off the market now, intending to wait for the IPOs to materialize and for prices to go up along with buyers putting all cash on the table.
The IPOs will also bring lavish multi-million dollar parties helping San Francisco musicians and restaurants in the process.
Jay Seigan books A-list performers for parties. He said, “There are nights you drive around San Francisco and you see bars and restaurants packed out with some kind of party. This year seems pretty off the hook with all the IPOs. ”
Real estate experts say the average homebuyer will not be competing at least initially with the IPO buyers who will be looking for luxury homes and city condos.
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