San Francisco sellers already licking their chops in anticipation of new IPO millionaires

Now that Lyft, the first of the ballyhooed Bay Area IPOs, has gone public the Bay Area is well on its way to creating a new slew of millionaires. Later this year when the likes of Uber, Pinterest, Slack and other make their way to the IPO stage San Francisco and the Bay Area will see even more millionaires in the making.

Once the employees have access to their funds they will definitely impact the San Francisco real estate market. The impact will not be immediate as lockup periods for selling the stock vary from company to company, but most don’t last for more than one year.

Of course the newly minted millionaires will affect the local real estate market. Over the past eight months home sales saw a sizable drop in homes sales. Specifically, sales volume in the nine-county Bay Area totaled 3,857 units, according to CoreLogic. This number represented the lowest number of sales that the region has seen in 11 years and nearly 28% below December 2018 levels.

The California Association of Realtors reported that the Bay Area median price rose 4.5% in January 2019 compared to January 2018. Median home prices in Marin, San Francisco, San Mateo and Santa Clara counties continued to remain above $1 million, while Marin County recorded a 12.8% annual price drop.

How will local San Francisco real estate sellers and buyers react? It certainly won’t be a welcome sight to buyers who were just recently starting to gain back some leverage.  Sellers may already be licking their chops, envisioning buyers overpaying for their dream house. Expect in the next six months for home sellers to solidly regain the upper hand.