Sound Off: How might the Uber, Lyft and AirBnB IPOs will affect our market?
A: Many have heard about the New York Times article, which foretells doubling and tripling prices, as millionaires descend upon already scarce housing stock in the City.
But I’m not seeing it quite that way.
The Times relied heavily on tech-based brokerages with interests in exactly the type of outcomes that they themselves are predicting. The upcoming tech IPOs will affect home prices, I just don’t believe it will be as pronounced as the article leads us to believe.
Here are some relevant details the article left out: Many of these companies are not yet profitable, there is a holding period for newly vested stock options, and, finally, there are stronger forces at play that could override the effects of the IPOs — such as interest rates and the greater economic cycle.
For an explainer video on the effects of the IPOs check out www.ratooshgroup.com/ipo.
A: This has been a topic of discussion with many of my clients since the end of last year. If you are a seller and are anticipating selling, there is no need to wait. Bring your property to the open market now. Inventory is still very low and there are many motivated buyers waiting for new inventory. The IPO buyers are already shopping and in good numbers, not all are waiting to be in a crowded playing field.
Sellers anticipate a higher increase in traffic that will drive up prices to much higher levels. We are already seeing record breaking sales, a property this past week just sold $1.3 million over list price in Eureka Valley.
If you are a buyer that has been on the fence to buy, this is your chance to finally jump in. It will be even more competitive but worth it once you get your piece of San Francisco real estate.
A: The impending IPO’s will likely be better for continued optimism for the Bay Area’s economy. How it translates directly to housing sales, or the housing market in general, is less predictable. If there are an estimated 6,000 new “millionaires” as a result, they will likely be absorbed in multiple counties that span San Francisco, from Marin, to the East Bay, to the peninsula.
Therefore, I don’t believe that the disbursement of 6,000 new “millionaires”, IF they buy versus rent, over such a large geographic area, will meaningfully change the market.
However, it will be very good for continued optimism as far as the outlook for the Bay Area economy.
Tracy McLaughlin, the Agency, 415-699-6680, firstname.lastname@example.org.