Posted on 02/28/2019 8:55:30 PM PST by ProtectOurFreedom
2019 is slated to produce an extraordinarily long list of multi-billion-dollar IPOs from San Francisco Bay Area heavyweights like Lyft, Uber, Palantir, Pinterest, Airbnb, Slack, Postmates, and Instacart. The result will be a massive and sudden injection of liquid cash into a region already infamous for both the nation’s priciest real estate as well as a vast and growing wealth gap between rich and poor neighbors.
On stage at Monday’s event, a three-hour catered affair titled “Tech IPOs effect on Bay Area Real Estate” held in DocuSign headquarters, Deniz Kahramaner, a big data real estate agent at the tech real estate firm Compass, laid out a series of shocking numbers about what to expect as San Francisco’s rich prepare to get so much richer. He estimated $250 billion in total valuation of the local companies expected to IPO this year, based on private investment, which dwarves anything seen in half a decade.
When Bravo reality television star and Sotheby’s real estate agent Roh Habibi took the stage, he thought out loud about whether his newly IPO-rich clients should spend $9 million on a single San Francisco property or buy three $3 million properties spread out around Northern California.
A group of real estate agents couldn’t help themselves from uttering “wow” out loud with every new big dollar figure on center stage: 211 techie buyers projected to purchase property above $10 million, thousands expected to buy above $1 million, and San Francisco’s real estate dominated by buyers—51.1 percent of whom come from the software industry—who are about to have a whole lot more money in their pocket.
(Excerpt) Read more at gizmodo.com ...
“Heaven help ordinary people...policemen, firemen, teachers, garage mechanics, garbagemen, utility workers, shop keepers, accountants, clerks, teachers, librarians, waiters, cooks...who simply cannot afford to live in the San Francisco Bay Area. “
the regular folk would be better off to just move to regions that pay well enough to live well, and let the legions of IPO gazillionaires fend for themselves WITHOUT policemen, firemen, teachers, garage mechanics, garbagemen, utility workers, shop keepers, accountants, clerks, teachers, librarians, waiters, cooks ...
Just scape the shit off your shoes and step over the screaming crackheads. You’ve made it.
Gotta bring in an ocean of H1B’s, right..?
Keep costs DOWN, buy a 20,000 square foot home.
WHO CARES if the proles outside the walls have to live in crime, squalor and a tangle of foreign languages..?
Heck, most those companies listed are actively moving out of that area because it’s too expensive.
What is interesting to me as an old timer is that in the 1970-1980s there was a similar real estate situation. The children of the wealthy families on the peninsula could not afford to buy homes near their parents, so they graduated from fine schools and moved elsewhere — where housing was less expensive. I was a teacher at the time, and we noticed that our schools had fewer and fewer kids each year and finally they laid off about the last 13 years of teachers who had been hired. Yes, I only had ten years.
They did not give up though, after a few dismal years they kicked open the doors to immigration and like magic, the schools had kids enrolling again. It turns out the immigrants were living two and three families to a house, but the schools were flush with students again.
Now, the same solution may be harder this time, but as you mentioned, there are a lot of lower paying jobs that a society needs to function. My guess is that they will double up again and keep those workers. But this time, the workers will see their incomes going up as well.
As far as immigration is concerned, there has not been any change in the border except for the barrier that is slowly being built. Now maybe we can see why Si Valley is so bought in to open borders.
What is interesting to me as an old timer is that in the 1970-1980s there was a similar real estate situation. The children of the wealthy families on the peninsula could not afford to buy homes near their parents, so they graduated from fine schools and moved elsewhere — where housing was less expensive. I was a teacher at the time, and we noticed that our schools had fewer and fewer kids each year and finally they laid off about the last 13 years of teachers who had been hired. Yes, I only had ten years.
They did not give up though, after a few dismal years they kicked open the doors to immigration and like magic, the schools had kids enrolling again. It turns out the immigrants were living two and three families to a house, but the schools were flush with students again.
Now, the same solution may be harder this time, but as you mentioned, there are a lot of lower paying jobs that a society needs to function. My guess is that they will double up again and keep those workers. But this time, the workers will see their incomes going up as well.
As far as immigration is concerned, there has not been any change in the border except for the barrier that is slowly being built. Now maybe we can see why Si Valley is so bought in to open borders.
There is a slight trend going on, with some smaller companies saying ‘adios’, and blaming cost of business in the region.
I think the eventual trend will be you start in Silicon Valley, and there will be x-day where you pack up and move to a tax-friendly state, with low cost.
I know several of the companies listed are bolting from California right now.
funny how a good functioning prosperous society is really based on children.
I remember shopping for my first house in ‘74. Looked in Moraga and was shocked to see a nice good-size rancher going for $90,000. I was so dismayed that I’d missed the big run-up in prices and was locked out of the market. I didn’t buy it. Instead, I waited to enter the market in ‘78 and, sure enough, prices had skyrocketed again. This time I got a 40 year old, 900 sq foot house in Palo Alto for $100,000. That was a princely sum for a young engineer at the time. Dad said “Son, that’s the stupidest thing you’ve ever done.” Too bad I didn’t buy a dozen of those little cracker boxes.
But, as you say, things are really different now. A tiny house then was 10X a young engineer’s salary. Now the same house is 20X or even 30X a young engineer’s salary.
Good point about the next cycle being real hard to do. We’ve played out Asian immigration with three generations living under one roof. The next thing will be companies leaving the Bay Area as another poster said earlier. He pointed out most of the companies IPOing in ‘19 are looking to expand out of the Bay Area or leave it entirely.
The problem is “where do we go”? Seattle is just as bad as the SF Bay Area as are many other major metro areas.
Well, Portland is high, but no where near SF Bay Area high. And I actually think Seattle is lower than SF Bay Area, but higher than Portland.
Of course, Oregon has just passed statewide rent control which will do something unpredictable to real estate. I expect it will nip prosperity in the bud, but what do I know -- I am just an old conservative.
How empty their lives will be living exclusively among others identical to themselves.
Not to mention who is going to police their streets, rescue them from fire, teach their children, fix their cars, etc., etc., etc....
Quit yur bitchin' everyone. Things have a way of working out.
As an aside, I can remember early in my career when I was a paper millionaire. Didn't mean a damn thing in my daily life and now it's gone.
Big effing deal.
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All registered democrates
At first I thought you said barrio. A lot of the entire central valley is barrio now. Closer to the money, like you said, 2 and 3 families in a single family house works out for them for now. But it's a barrio. In the longer run it means wealthy areas next to slums. The barriers are being built inside the USA.
You are right, of course, but it was nicknamed “tech” 30 years ago.
wow, nice insight
There are 14.8 million Americans with a net value of over $1 million. That’s 11.76% of all US households. Adding a few hundred overnight is nice, but...
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