IPO Wealth Begins Showing Up in Rising Bay Area Home Prices

Posted on May 31, 2019 by

SAN FRANCISCO (KPIX) — There is an increase in buyer activity across the Bay Area suggesting that IPO expectations are already showing up in the real estate market. The chief economist at Compass Selma Hepp says this is particularly the case in San Francisco and San Mateo counties.

“I think buyers are trying to come in ahead of the expected IPO influx of buyers so there’s a lot of anticipation,” Hepp said.

The latest data from Compass shows buyer demand is picking up despite a small drop in median home price. Contracts in April were up 9 percent year-over-year across the Bay Area — the highest increase since summer 2017.

Hepp says this suggests strong home-buying months ahead.

“Today’s market is vibrant,” said real estate agent Ana Dierkhising. “The inventory is very constrained so buyers are motivated.”

Dierkhising and Val Steele are co-listing agents for one of the newest and sleekest homes in San Francisco’s Pacific Heights neighborhood.

2833 Vallejo features four bedrooms, 6 1/2 baths and 4-car parking across 6,050 square feet. There are also expansive views of San Francisco landmarks from multiple levels and high-tech amenities. The asking price: $19 million.

Dierkhising and Steele say they are seeing more traffic at their open houses and private showings. The luxury market seems to be benefiting the most but the upward trend is not dramatic.

“There’s that six-month lockup period, there’s different classes of stock, so it’s going to, I think, trickle in over the next year, year and a half, two years,” said Steele. “There’s not that one magic day that all this cash is going to appear on the market.”

Sales of homes in San Francisco priced above $3 million have surged again after significant declines in the previous six months, according to Compass.

“There’s a long pipeline of IPOs coming on so it’s going to impact one way or another.”

Article source: https://sanfrancisco.cbslocal.com/2019/05/30/ipo-bay-area-housing-prices-rise/

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Bay Area home prices flatten as buyers are ‘getting their sanity back’

Posted on May 31, 2019 by

Bay Area home prices stalled out for a second straight month in April, a sign they may have reached their limit despite the region’s robust economy and rock-bottom unemployment.

The median price paid for a new or existing home or condo in the nine-county region was $850,000 in April, up 2.4% from the previous month but unchanged from April 2018. In March, the median price dipped a scant 0.1% from the same month last year, according to a report released Thursday by research firm CoreLogic.

Bay Area home prices flatten as buyers are ‘getting their sanity back’

“We are seeing more price reductions, more contingent sales, we are not having the spring we had last year,” said Joan Ulibarri, a Compass real estate agent on the Peninsula.

In April of last year, the median home price was up 13.3% year over year, CoreLogic said, and in Santa Clara County alone, it was up a breathtaking 27.6%.

According to a separate study from the California Association of Realtors, the median price paid for an existing single-family home in April fell 2.2% from April 2018 in the Bay Area, the only region in the state with a price drop. Statewide, the median price rose 3.2%. For existing condos, the median price dropped 5.2% in the Bay Area and fell 0.3% statewide.

  • Bay Area home prices flatten as buyers are ‘getting their sanity back’
  • Bay Area home prices flatten as buyers are ‘getting their sanity back’
  • Bay Area home prices flatten as buyers are ‘getting their sanity back’

“There are more active listings, a lot more to choose from” in the Bay Area, said Jordan Levine, the association’s deputy chief economist. There has also been a shift in the mix of sales, with fewer high-end sales and more entry-level sales. That lowers the median price, which is the price at which half of homes sold for more and half for less.

Looking at the median price paid per square foot adjusts somewhat for the mix of homes sold. For the Bay Area, the median price paid for a single-family home was $563 per square foot in April, up slightly from $561 last April. For condos, the median price paid per square foot dropped to $596 from $629.

“Compared to other regions in the state, the Bay Area is way past previous highs set during the last cycle,” which ended around 2007, Levine said. “Affordability is undermining demand (in the Bay Area). It’s becoming harder and harder to see the same amount of price growth we sustained through the current cycle. The economy is strong, but at the end of the day, people still have to make those monthly mortgage payments. There is an upper bound in the Bay Area where people can actually afford homes.”

Compass agent Virginia Supnet put it another way.

“Buyers are being a lot pickier,” she said. “They’re getting their sanity back.”

Supnet, who works on the Peninsula and the Coastside, concurred that sales are still brisk at the lower end but sluggish at the higher end. Where those two ends meet depends on the location.

In Half Moon Bay, anything priced from $900,000 to $1.5 million is still moving quickly. But Supnet has a listing on Miramar Drive in Half Moon Bay that’s been on the market since December. After two price reductions, it’s listed at $2,390,000, with 4,140 square feet of space, ocean views, a home theater, gym and wine cellar.

“People love it,” she said, “but it’s either not in their price range or they could afford it but they think, ‘Do I really need all this space?’”

In Menlo Park, “anything under $2 million would be gone in an instant. Once you start getting to $3 million or $3.5 million,” things slow down. “I think people are tired of overpaying,” she said.

In some cases, they’re going elsewhere. New census data showed that the Bay Area’s estimated population growth over the past two years slowed dramatically compared with the previous six.

Steve Salta and his wife are moving July 1 from San Francisco to Portland because they’ve outgrown the two-bedroom, 1,000-square-foot home they’re sharing with their two boys, ages 6 and 2, and a dog.

“My wife and I really wanted to stay here,” he said. “I love the idea of raising my children in an urban environment, a major market where you step outside and any type of food is there, any type of people are there. We love that.”

But a three-bedroom home in a good school district would have cost at least $2 million, including likely renovations.

“If we tried to stay here, with our financial situation and income, we’d be house poor and in a very risky situation” if one of them lost their job, Salta said. “As much as we love the Bay Area, it would be irresponsible of us to spend our money this way considering we have two young kids we are trying to provide for.”

In Portland, where Steve Salta grew up, they can move into a home his family owns. His wife, Michelle, is self-employed and Steve can keep his job in business development at Healthline, a medical information website, and come to the San Francisco office once a month.

It’s too soon to say what impact this year’s crush of Bay Area initial public offerings will have on the housing market. The two biggest companies to go public — Lyft in March and Uber in May — are trading below their IPO prices. A number of smaller ones — such as Shockwave Medical, Zoom Video Communications, Silk Road Medical and PagerDuty — have soared. But employees generally can’t cash in their company stock or options until six months after their IPO dates, and that won’t be until fall.

Although the number of Bay Area homes on the market in April was higher than last April, it was still low by historical standards. That means “there is still lots of demand,” Levine said. “If you inject the local economy with lots of cash, that’s going to exacerbate the existing supply constraints.”

It’s worth nothing that the median price in San Francisco County alone hit a record high — $1.4 million — in April, surpassing the $1.38 million record set in March, according to CoreLogic. Many of the companies with this year’s biggest IPOs, including Uber, Lyft, Pinterest and Levi Strauss, are based in San Francisco.

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender

Article source: https://www.sfchronicle.com/business/networth/article/Bay-Area-home-prices-flat-for-a-second-straight-13907307.php

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How will the tech IPO boom change Bay Area real estate?

Posted on May 30, 2019 by

Perhaps you have heard that tech initial public offerings are blooming like wildflowers this spring. Lyft, Pinterest, Uber, Zoom, Slack and more are coming, almost all of them headquartered in the San Francisco Bay Area, which is already among the least-affordable places in the country. A lot of early employees of these companies are about to make a bunch of money on their stock options.

In a place where the median home price is $830,000, what’s all that wealth going to do to housing prices? Host Molly Wood talked with Glenn Kelman, CEO of Redfin, a real estate company that offers both brokerage services and data. She asked him what kind of data he has about what’s coming. The following is an edited transcript of their conversation.

Glenn Kelman: Redfin agents are working with some of these people who are borrowing money against stock that’s still locked up to be able to buy that house. We’re starting to see lenders say, “Even if you can’t sell the stock because you have to wait six months after an IPO, we’re willing to loan you the money because we think that bet is going to pay off.” Those are some of the numbers we look at. We think the ultimate effect on prices is going to be probably a three point acceleration in home prices. If you look at when Facebook, Twitter and LinkedIn went public a few years ago, take the normal price appreciation and add about three points to it. It’s not overwhelming. It’s not as if home prices are going to double in one year, but it is a significant effect.

Molly Wood: Obviously, this is not normal. It’s sort of a combination of the number of companies concentrated in one area, the valuations and the way these companies pay their employees.

Kelman: Normally you wouldn’t see so many companies go public all in one place. I think the way most economists look at housing is they measure its affordability by looking at the ratio of the home price to wages, but that has completely been unhinged in the Bay Area. The reason that place breaks all the laws of physics is because it doesn’t matter what your salary is, you’re using your stock to buy a house, and that stock is shooting through the roof.

Wood: It sounds like normally if there were a bunch of tech IPOs, there would be a sort of sense of euphoria maybe among real estate agents in San Francisco, let’s say. But it sounds like you’re saying that may not be the case here.

Kelman: Yes, I think that stockbrokers and jewelers and people who sell expensive cars are very excited about this, but real estate agents feel maybe a sense of dread, that the bidding wars we’ve become accustomed to are going to go to a whole new level. The reason that’s so is because you can make more jewels and cars, but houses, there are only a limited number of single-family homes in San Francisco. People are commuting two hours to teach at a school, to perform some other middle-class job, and we’re not building the housing to let those people live near where they work.

Wood: Forgive me if this sounds a little bit like wishful thinking as a renter in the Bay Area, but to what extent is this cyclical? Will San Francisco or even Oakland eventually have to become more affordable by default?

Kelman: The laws of supply and demand are already at work. That’s why people are renting U-Hauls and driving to Oregon. I do think that at some point, when houses get too expensive, price increases will ameliorate. I think in some ways, whenever there’s a huge tech rally, you always have some curmudgeon saying, “Wow, that bubble is going to burst.” I think some of the people who are advocates for affordable housing, for middle-class housing, are leading the charge this time. I don’t know if I want to characterize myself as a curmudgeon, but I left San Francisco to run Redfin 14 years ago, and I always planned to come back. One of my kids the other day said, “If we ever came back, do you think we could afford it?” I don’t know, man. I don’t know. If I’m worried about it, everybody else must be, too.

Related links: more insight from Molly Wood

Data released earlier this week found that housing prices in San Francisco fell 0.1% last month, the first drop in prices since 2012, and who knows, possibly the last one for another seven years.

The city of San Francisco’s Budget and Legislative Analyst’s office is even more pessimistic than Glenn Kelman, on home prices anyway. It estimates more like an 11% increase in prices resulting from all the IPOs. A separate real estate agent and data analyst said that if all the companies about to go public stay successful and keep bringing in new employees and paying them well, that prices could double over the next five to 10 years. That’s assuming, of course, that everyone doesn’t just move away.

Meanwhile, it’s not like the tech economy is suffering. Bay Area-based Twitter and Facebook turned in strong earnings reports this week, and Apple beat estimates, too, despite its lower iPhone sales. Alphabet, the parent company of Google and Square, was the only disappointment. But I’m not talking the kind of disappointment that leads to mass layoffs and thousands of people no longer having to commute to Mountain View. And nobody thinks Google is going out of business. No, no, for Bay Area residents, it’s all just too much of a good thing.

Article source: https://www.marketplace.org/2019/05/02/silicon-valley-real-estate-market-tech-stock-ipo/

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How to get the most out of your San Francisco Chronicle subscription

Posted on May 29, 2019 by

Thank you for being a subscriber. The San Francisco Chronicle wouldn’t exist without your support.

We’re working hard to make improvements to our print and digital products every day. In case you’ve missed it, there are lots of ways to get more out of your subscription. Here are eight ways to enjoy The Chronicle every day:

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As a subscriber, you can log yourself in to SFChronicle.com for access to all of our journalism. Print subscribers can get digital access at no extra cost. Online, we publish a number of articles online-only each day. Here’s a taste of what you get online:

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Libby Coleman is The San Francisco Chronicle’s innovation editor. Email: libby.coleman@sfchronicle.com

Article source: https://www.sfchronicle.com/bayarea/article/How-to-get-the-most-out-of-your-San-Francisco-13902111.php

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Sound Off: Who are the major players in a standard real estate deal?

Posted on May 28, 2019 by


  • d927c 920x920 Sound Off: Who are the major players in a standard real estate deal?

    Suna Mullins

    Suna Mullins


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  • Sound Off: Who are the major players in a standard real estate deal?

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Suna Mullins

Suna Mullins



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A: Your typical real estate transaction involves a number of key players, depending on whether you’re buying or selling a home.

However, the players that stay constant on both sides of the transaction are lenders, general home inspectors, pest inspectors, water and energy inspectors, home stagers and of course, your trusted Realtor.


Working with the right lender is imperative, especially one that moves at the same fast pace as the Bay Area market. It is important to perform all home inspections for the sale of a home, as they provide prospective buyers with the needed information to make a quick and informed decision.

With homes often selling in just days of coming onto the market, they are of paramount importance. Home stagers make a home shine and fill in the gaps where most might lack imagination. Lastly, you should always feel that your Realtor has your best interest at heart.


Ron Abta, Polaris Realty, 415-595-7661, ron@polaris-re.com.

A: The acrostic poem below lists those typically involved in a transaction. If a transaction involves all-cash or is sold as is, appraisers, bank lenders, and inspectors may be taken off the list.

So whether you are listing or looking to buy, having an agent with good people skills is paramount, as they will be the conductors of the transaction orchestra, making sure all the players mentioned hit the right notes at the right time. In other words, music to everyone’s ears.

• Transaction coordinator

• Real estate brokerage

• Agents: buyer’s and seller’s

• Nay-saying relative (“That’s too much to pay for a house!”)

• Seller

• Appraiser (if a loan is involved), attorney

• City Hall employee (to record the title)

• Trepidatious or truly happy buyer

• Inspectors: Pest, energy and general home

• Officers: Lending, escrow and title

• Notary-authorized representative

Suna Mullins, McGuire Real Estate, 415-516-3273, smullins@mcguire.com.

A: It takes a village, as they say, and real estate transactions are no different. There are many moving parts that are best handled by a group of professionals each responsible for their piece of the puzzle.

As the Realtor, I stand at the center and focus on the whole while coordinating the parts. I work to source the right providers to play their part, all moving toward our shared goal in service to the client.


It starts with preparations: painting, flooring, repairs, staging. Then disclosures: pest, contractor, structural inspections, homeowners association documents. Presentation: photographers, drone pilots and videographers. Spread the word: marketing team, writers, social media pros. Get it closed: escrow/title, lenders, underwriters and appraisers. Notary. Broker administrative staff. Changing of the guard: Movers, designers and furniture suppliers.

You can see how many people are working, often behind the scenes, to close a deal. But if all goes to plan, my clients just see the end result and think it was a piece of cake.

Adam Gavzer, Compass, 415-505-0714, adam@gavzer.com.


Article source: https://www.sfgate.com/realestate/article/Sound-Off-Who-are-the-major-players-in-a-13817748.php

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