With a number of big tech unicorns expected to go public this year – including Uber, Palantir, Pinterest, Slack, Airbnb and Postmates – real estate players are taking cues from the impacts of previous IPOs, and anticipating a “wave” of newly-minted millionaires looking to invest in property.
This time around, the Wall Street Journal’s Katherine Clarke (subscription) expects much of the financial impact to center on San Francisco, as most of the companies expected to go public are based there.
Last month, real estate agency Redfin posted an analysis on the impact that the public offering of ride-sharing company Lyft could have on the market. Based on an IPO price of $72 a share, Redfin estimated that Lyft’s current and former employees would hold about $1.458 billion worth of stock.
With that kind of money, they could hypothetically buy all 623 homes listed for sale in San Francisco at that time—and still have $12 million left over, Redfin said. Lyft went public in late March; as of Thursday morning, its shares were trading at around $61 a share.
For buyers and sellers, the pre-IPO buzz has unleashed a lot of consternation. Real-estate agents say buyers are plunging into the market with a renewed sense of urgency, fearful that an influx of newly minted millionaires will set prices on an upward trajectory and make an already tight market even worse. Sellers, worried about missing the height of the wave, wonder if they should hold off listing altogether.
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