IPO Fever Has Yet to Bolster San Francisco's Real Estate Market
(Bloomberg) -- Uber. Lyft. Pinterest. This year’s blockbuster tech IPOs have had real estate brokers in the San Francisco Bay area salivating over the prospect of fat commissions from home purchases by newly minted millionaires.
But halfway through the housing market’s key spring selling season, there’s little indication that flush buyers are bidding up prices beyond their peak last year.
In San Francisco, homes fetched a median of $1.65 million in March and April, little changed from the same period in 2018, according to a report Tuesday from brokerage Compass. In San Mateo County, south of the city, prices were down 5 percent. Properties were also taking longer to sell and changing hands closer to the asking price.
“We’re bumping up against what prices people are willing to pay or can pay,” said Patrick Carlisle, chief market analyst for the region at Compass.
There also could be some other reasons for the muted response, he said. An active secondary market has allowed many employees at high-flying tech startups to get liquidity before their companies go public. Banks in the Bay Area have also gotten accustomed to lending to borrowers who have stock options.
That said, housing has rebounded some from a chill last year that was spurred by stock-market turmoil and higher interest rates. Uber Technologies Inc.’s long-awaited initial public offering has yet to happen, with pricing planned for this week. Plus, as Carlisle noted, there are still two months of spring sales data yet to come and anecdotal reports suggest that some new listings are getting bid up.
“I have to assume that these IPOs will add some to buyer demand,” Carlisle said. But “I find it extremely hard to believe that we will see a resurgence of the year-over-year appreciation rates that we saw last year.”
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