This week the social media giant is expected to open its doors to the general public. Overnight, Facebook will become a publicly traded company and a plethora of 20-somethings will see their personal wealth skyrocket.

In April, Facebook estimated its value at $77 billion, but since then the Palo Alto-based company’s worth has been assumed to be somewhere in the $100 billion range. This influx of cash will have a number of impacts, one of which could be the increase in property value.

Using a conservative analysis, Movoto — a real estate brokerage in the San Mateo — estimated that Facebook’s coming out party could increase property value in trendy Bay Area neighborhoods and cities by $1 to 2 billion.

“Competition to buy listed homes in desirable Bay Area zip codes is already discouraging for the average home buyer.” said Mark Brandemuehl, VP Marketing Business Development at Movoto. “The Facebook IPO will only add to the millionaires competing to buy a small number of homes, and it seems inevitable that prices will be driven up.”

To make this analysis Movoto spoke with Carole Rodoni, president of Bamboo Consulting, a Bay Area real estate agent. Rodoni expected overall property value to rise.

She estimated that property value in fashionable areas will increase anywhere from five to 10 percent. This is on top of the area’s typical appreciation. She expected this mini housing bubble to last between a year and 18 months.

Those trendy areas are:

• Pacific Heights;
• Noe Valley;
• South of Market Area in San Francisco;
• Hillsborough;
• Atherton; and
• Palo Alto.

Rodoni called these new renters and homebuyers “shuttle babies” because they prefer to move back and forth between areas. It also means these shuttle babies are looking to move to areas where “you can walk, and within four blocks, you get your whole life.”

How the Math Works:

To figure out how Rodoni’s estimate would translate into a dollar amount, the Movoto team divided the trendy Bay Area locations into two parts: cities such as Hillsborough and neighborhoods in San Francisco.

For the cities, Movoto used Census data to calculate the number of owner-occupied households in the area. After learning this figure, we used housing data to calculate the 75th percentile of current home list prices-or, the most valuable homes on the market, which the wealthy are more likely to purchase. We then applied the estimated five to 10 percent price increase to homes priced at the 75th percentile and above.

Movoto used a similar process for the San Francisco neighborhoods.

A Second Opinion

But like most things, there’s a difference in opinion.

Kathy Krize, a real estate agent in the Menlo Park area, called the local housing market “quirky” and suggested there was a small housing bubble in high-end areas. Nonetheless, Krize was hesitant to attribute the increase in home prices in the Bay Area to Facebook.

“I think all this media hype going on isn’t necessarily true; it may have an impact, but not the impact everyone is talking about,” she said.

She did note that some potential homebuyers believe they need to purchase a home before the newly minted rich do so, and at the same time there are buyers who want to wait to put their homes on the market in the hopes of gaining value.

“The fact is, a lot of them already have the ability to purchase,” she said about Facebook employees. “I think the impact would have been seen already. I’m not seeing a lot of people from Facebook coming into the open houses.”

From her experiences, Krize said that she’s seen an increase in the number of cash offers and noted homes are regularly selling above the asking price. She noted that buyers using more traditional financing are losing out to cash offers.

“It’s a quirky market,” Krize added. “It’s not to say that every home on the market is getting picked up. What I’m saying is that there are a lot of buyers who want to have prime property and there isn’t a lot of prime property on the market.”

Krize offered this example to explain the market trend: She recently listed a two-bedroom, one-bath home in a marginal neighborhood — what she called a great starter house — for $368,000. After five offers the house sold for $420,000.

“There is something going on with the market,” Krize said. “We are seeing it across the board.”

Article source: http://www.huffingtonpost.com/david-j-cross/san-francisco-real-estate_b_1527172.html

Critics of the plan have said the Metropolitan Transportation Commission, which guides policy for region’s host of transit agencies, should not use toll money to purchase the new headquarters, at 390 Main St. in San Francisco. The relocation plan drew particular heat since the MTC’s proposed bid for the building — $105 million before renovation costs — was nearly twice as much as the $60 million that the U.S. Postal Service sold the property in 2009.

East Bay officials in particular criticized the proposal, saying the MTC should pursue new headquarters in its longtime Oakland home. Disabled activists also said the new location was too far from local transit options. In response to these criticisms, the MTC rescinded an earlier approval of the relocation plan, in favor of forming an ad-hoc committee to explore its other options.

Despite the concerns, the ad-hoc committee has recommended again that the MTC should move forward with the relocation effort to 390 Main St.. The committee detailed a number of findings supporting its decision, noting that market prices have appreciated considerably since the post office sold the building.

The committee also said that the new location is only four blocks from the Embarcadero BART station, and that a van would be available to provide shuttle service for disabled passengers.

Although the MTC plans on spending nearly $180 million to purchase and renovate the building, the agency actually projects to net $49 million over the next 30 years by renting out the property to other tenants, according to agency spokesman Randy Rentschler. The agency has said it’s essential to purchase the new building to accommodate its growing staff.

San Francisco Supervisor and MTC Commissioner Scott Wiener said the relocation plan is a good idea. “Over time, this will pay for itself,” Wiener said. “This committee conducted an extensive analysis of various options, and it was not even a close call.”

State Sen. Mark DeSaulnier, D-Concord, an opponent of the move, said that using toll funds for the project was inappropriate.

“Commuters must travel Bay Area bridges daily to get back and forth to work,” DeSaulnier said in a letter addressed to the MTC. “They expect that their toll fees go to road repair and bridge maintenance, not for real estate speculation.”

On Wednesday, the MTC will vote once again on the relocation proposal.

Middling returns?

$179 million: Cost to purchase and renovate 390 Main St.*
$60 million: Cost that the USPS sold the building for in 2009
$49 million: Rent revenue the MTC projects to net over the next 30 years

*Includes contingency costs

Source: MTC

wreisman@sfexaminer.com

Article source: http://www.sfexaminer.com/local/2011/09/mtc-reiterates-desire-move-san-francisco