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

“I’m kind of worried – a thousand millionaires are going to be buying houses!” Connie Cao said as she and her family toured a home in a good school district here.

Her husband, Jared Oberhaus, was more optimistic. “Maybe sellers are sitting on their houses now, waiting for Facebook, and they’ll all come on the market at the same time,” he said.

It will be some time before the first Facebook shares are sold to the public, and even longer before Facebook’s employees are able to turn their paper wealth into cash and officially take their places as the newest members of the 1 percent. But the mere anticipation of the event may pour a little kerosene onto what is already a fairly hot local real estate market.

When Ken DeLeon, a Silicon Valley real estate agent, recently sold an 8,000-square-foot house to a Facebook employee, he said, the movers showed up at the client’s old 1,000-square-foot home and asked, “Did you win the lottery?”

Silicon Valley has been good to Mr. DeLeon, a former lawyer, who said he sold $275 million worth of homes last year, and who is finishing up a memoir about overcoming illness, injury and loss that he calls “Why Do Bad Things Happen to Sexy People?”

Even after some of the air went out of the housing bubble in the Bay Area in recent years, prices in the most desirable parts of San Francisco and Silicon Valley stayed buoyant enough to remain out of reach for most people. A report on 2011 housing prices by Coldwell Banker, the real estate company, found that 8 of the nation’s 20 most expensive markets were in Silicon Valley or the Bay Area. Mr. DeLeon said Palo Alto, with its limited supply, had remained remarkably strong – and could hit new peaks this year.

In recent weeks, he said, there have been signs that the market has been heating up more: 10 homes in Palo Alto sold for more than their asking prices last month, some by large amounts. Now, with the long-expected Facebook public offering a step closer to reality, Mr. DeLeon said he expected to see several things happen: some sellers may keep their homes off the market until they judge the time is right, some speculators may snap up old houses to tear down and rebuild, and some buyers may feel pressure to make offers before the deluge hits.

A steady stream of would-be buyers walked through the open house Mr. DeLeon held here on Sunday – a 2,325-square-foot home with a small backyard and an asking price of nearly $1.8 million. They checked out the sunken Japanese-style dining room and the heated concrete floors with leaf inlays. Many got lattes from the barista stationed in the backyard.

Mr. DeLeon said he already had plans to market to Facebook employees. One strategy: he intends to buy ads on Facebook. “It’s amazing how you can target them,” he said.

Article source: http://economictimes.indiatimes.com/news/international-business/facebook-millionaires-might-drive-up-real-estate-prices-in-the-already-expensive-area-of-silicon-valley/articleshow/11818491.cms

Meanwhile, sellers in the know are waiting to list. “It seems foolish to put [my house] on the market when there are a thousand people down the street who are about to make a million dollars,” said SF homeowner Adam Holm, whose Potrero Hill home is easy walking distance to Zynga’s headquarters.
· IPOs Stoke San Francisco Housing Market [Reuters]

Article source: http://sf.curbed.com/archives/2011/11/29/yet_again_local_ipos_make_sf_real_estate_dearer_still.php

When Oracle billionaire Larry Ellison was selling San Francisco on the benefits of hosting the 2013 America’s Cup, the city was assured that the internationally renowned yacht race would bring in over a billion dollars in revenue into the Bay Area at little to no cost to city government. For San Francisco taxpayers, a group notorious weary of ponying up public funds for private sporting events (the beloved San Francisco Giants couldn’t even get the city to shell out for their fancy, new stadium), it seemed like a dream situation–the opportunity to watch the world’s greatest yacht race in person without needing to travel and having the same cadre of millionaires who pushed for the race in the first place pick up the tab. What could go wrong?

There was just the tiny, little issue of the $12 million in fees the city is supposed to pay this year for environmental planning and state/federal permitting. While the city is on the hook for these fees, the America’s Cup Organizing Committee agreed to fully reimburse all the costs. The problem is that the committee is, reports the Ex, significantly behind in its fundraising and, if things don’t pick up soon, the city will be footing the bill out of its general fund–money that’s supposed to pay for everything from police to road construction.

While the committee has thus far raised a mere $2 million, organizers claim that they’ll be able to gather the rest with ease after the organization is granted tax-exempt status, which Executive Director Kyri McClellan expects to receive in August. Without tax exempt status, argues McClellan, many of the race’s wealthy supporters were uncomfortable making big donations without getting the requisite tax write-off. “I have every confidence we will meet our obligations in the host-city agreement,” she told the Ex.

Depending an organization’s complexity, gaining tax exempt status can take between 3 months to just over a year.

If the tax exempt statues is granted, then the effective day relates back to the date of the formation of the organization–meaning that donations made before the tax exempt status was officially granted would retroactively become tax exempt after the fact.

Why the America’s Cup Organizing Committee hasn’t been exploiting this is unclear. Either backers didn’t feel confident about the eventual granting of tax exempt status or organizers simply felt confident they could raise $12 million at the drop of a hat.

If the committee doesn’t meet its fundraising obligations to the city on time, San Francisco is technically able to pull out of the deal, however the possibility of that actually happening is extremely unlikely.

“If they don’t pay and the city lets them get away with it,” the race’s most high profile critic former Supervisor Chris Daly tells the Appeal, “then they’re just being little bitches.”

Requests for comment from the race’s organizers were not returned at publication time.

That said, it’s not out of the question that the committee could raise the needed funds almost instantly–it’s a veritable Who’s Who of San Francisco high society. The committee is comprised, among others, of William J. Clinton Foundation Director Doug Band, Gap heir Bob Fisher, banjo-picking private equity billionaire Warren Hellman and real estate magnate Mark Buell.

The effort even has Dede Wilsey behind it. Her Wilseyness is the type of legendary fundraiser capable of generating $10 million while taking a nap. Ellison, the effort’s main figurehead, is the sixth richest man in the world.

Having so many deep-pocketed individuals on their team is going to be crucial because the overall cost of the race to the city has been budgeted at $32 million, all of which the committee has pledged to cover. Outside of what it owes to the city, committee is planning on raising a grand total of $270 million to cover all of the necessary infrastructure improvements. That’s in addition to $86 million in rent-free leases the city has granted Ellison for properties along the waterfront.

As originally pitched to the city, the bill for the race was significantly higher. A report prepared by the Budget Analysis Office, at Daly’s bequest, found estimated the cost at $128 million with a mere $22 million coming back to city coffers as increased tax revenue.

As a consequence of the report, the city’s initial plan to create a massive complex in Mission Bay was significantly scaled back and moved to the northwest quadrant of the city–saving San Francisco millions in the process.

Ellison’s sailing team, BMW Oracle Racing, won the last America’s Cup held in Valencia, Spain in 2010. Next time, he’ll have home court advantage.

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Article source: http://sfappeal.com/news/2011/06/slow-fundraising-for-the-americas-cup-could-cost-the-city.php

Condo sales in Miami were up 134 percent in January year-over-year, according to the Miami Association of Realtors. That’s not a typo.

“The Miami market continues to outperform the rest of the nation mostly due to the strong impact of international buyers and record affordability,” said Jack H. Levine, Chairman of the of the MAR. International buyers, low prices, and the weak dollar are certainly pushing the sales, but with those sales is coming a new phenomenon not seen since the housing boom.

Yes, prices for condos are down 36 percent annually to a median price of $91,200, but those prices are beginning to stabilize, despite the fact that there are about 3600 vacant units on the market in downtown Miami alone. Huh? How do prices stabilize with a three to four year supply??

“I think the way you get prices going up is by artificial price setting,” claims Peter Zalewski, principal at Condo Vultures, a real estate sales and consulting firm.

“I’m not going to use the C word, collusion, but there’s a certain price mechanism that all of the owners are starting to abide by and adhere to.”

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