By now, many of you have not only seen, but forwarded and asked us about this recent New York Times article, Thousands of New Millionaires Are About to Eat San Francisco Alive. There’s been a podcast on NPR about it (Upcoming Tech IPOs Already Influencing Bay Area Real Estate), the real estate forums are lighting up, every single buyer or seller I meet has it on their mind, and generally the panic button has been pushed, and pushed big time.
That article served a great purpose, it got people talking, and it got millions of people reading it, sharing it, and clicking on it. The headline alone makes one picture Godzilla standing over our city and eating all of the nice and kind people that already live here…and eating us alive no less! So naturally, you have to read the article. Not to mention, everyone wants to strike it rich, so it eats at those of us who aren’t so fortunate to basically hit this lottery. The headline knocked it out of the park, for sure. That’s good for the author, it’s good for the New York Times, and really, we can leave it at that.
It’s important to note, as the very same author who wrote that piece says on NPR, “It’s anyone’s guess what happens when these companies go public“…many of which are still “massively unprofitable“. It’s a guess. It’s speculation. It’s not reality at the moment, and it’s certainly not going to happen all at once.
We’ve seen this before in San Francisco, sometimes it goes gangbusters (Apple, Facebook, Google) and sometimes it doesn’t end well (remember Webvan?).
Remember Groupon? Granted it’s not an SF company, but was certainly hyped.
Snapchat? Also not SF, but hyped beyond all recognition.
Sure, a lot of people made a lot of money, but not everyone did.
The fact is, San Francisco is an amazingly popular and desirable place to live, with or without the tech industry, and it will probably continue to to thrive, new tech millionaires ornot.
So sellers, don’t wait for it to happen. The market is good right now. It’s great, in fact. Sure, a bit spotty in some places, but if you wait like all the rest, you might be in a similar situation as all of those who waited until after Labor Day this Fall to list their places, and the market kind of took a hiccup, and suddenly there was all this inventory not selling. Furthermore, if you wait til June or July, you’ll be in the Summer Doldrums and you might as well just knock $100,000 off your price and hand over negotiating power to buyers at that point. You also can’t forget the global uncertainty out there that could trump all IPO momentum and send all of us into a tailspin.
For buyers, get in now while the market is uncertain and all of these millionaires (who still don’t exist) aren’t out there competing with you.
Everything you’re reading is speculation. It hasn’t happened. What we do know is that IF the IPOs happen, and IF they were all to happen at once (Vegas bookies love that kinda sh*t), it’s not like all of a sudden 10,000 +/- people are going to walk out and buy a house. There are going to be lock-up periods on that stock, there are going to be some people that take their cash and run, and there are going to be the smart people that talk to a good financial advisor, invest some here, invest some there, and proceed with caution.
So this IPO palooza (No credit to Perry Farrell on that by the way), is, IMHO, more hype less substance. Sell when the time is right for you to sell, and buy when the time is right for you to buy. Don’t hedge bets on anything the media, or hyped up real estate agents are telling you.
The real estate apocalypse is not here. There will be new millionaires, there will be some who love this, some who hate this, more homeless problems, and all kinds of things happening that we’ve seen before. We will survive. It will all work out. You will not be eaten alive.
Our market ebbs and flows…up in Spring, down in Summer…up in Fall, down around the Holidays. Since I started selling real estate way back in 2001 it has been a tight market with limited supply and high demand. That isn’t changing.
Enjoy the day. The sun is out. Snowpack is MASSIVE. Restaurants are open. Power is on. Northern California living at its finest.
Happy Aloha Friday…
–Thousands of New Millionaires Are About to Eat San Francisco Alive
–Beautiful Mission Dolores Flat for Sale, $1,295,000 [theFrontSteps]
–More Listings Coming Soon [theFrontSteps]