money does not grow in San Francisco on the trees. But the upcoming IPOs of Uber, Lyft, Airbnb, Pinterest and a few dozen other tech companies make up to 10’000 employees practically overnight millionaires. What to do with the money? “The Millennials behave differently than previous generations,” explains Kevin Kropp, real estate agents, taught for 15 years houses and apartments in San Francisco. “You have no patience. You want to invest the wealth immediately and quickly see success. The stock market is attractive enough. Therefore, they buy houses, even if it appears to be expensive. Money plays no role, because you deserve it.”

estimates on how much money the stock exchange, introduction of course, vary. However, many analysts believe that in 2019, provides the best conditions for tech companies on the stock exchange to raise capital and to allow the employee, their options and share packages to stimulate a high price. Uber is likely to be rated up to 120 billion, Airbnb is already valued now with 31 billion, and Lyft, it should bring at the time of the IPO in the coming weeks to 25 billion dollars. Even if only half of the stock market should be a course successfully, it is said, at Sotheby’s, is likely to be, at a stroke, 10’000 young millionaires created.

The Rich keep to themselves

The first sign of the expected wave of buying are already visible. Potential buyers who are not involved in one of the IPOs, feeling a slight panic, to be out of the market. He felt an existential fear, to miss the time to buy, says Tom McLeod, founder of the Start-up company, Omni. After he stayed for ten years rent, he bought recently a house, although the price spiral in the last couple of years had accelerated. Until a few years ago, a simple renovation needy house was for a Million dollars, says Kropp. “Today, nothing is under $ 1.5 million.”

In trendy areas with a nearby motorway connection to Silicon Valley, the threshold is more higher. “Five million dollars for a house in Noe Valley is nothing Special any more.” Even 20 years ago, based in the neighborhood working class families of Irish and Italian origin. Today, the Noe Valley is a stronghold for young millionaires and their families. They remain largely among themselves, the working class families were displaced. Also very close is Facebook CEO Mark Zuckerberg, has created a luxury Villa in the estimated value of $ 72 million, however, little friends among the residents lives.

relocation from Silicon Valley to the city centre

As a Google 15 years ago and, later, Facebook went on the stock exchange, strewing the employees of your new wealth, wider, as the headquarters of both groups of 50 to 60 miles South of San Francisco. The buying pressure was concentrated in the city. In 2019, it’s different. Uber, Lyft, Airbnb, and almost all other publicly agree companies have settled in the city, the desire of the staff for a short commute to work.

“you don’t buy cars, and you are looking for is no Nobel house, as the old money has done this. You want to be in the middle of the city, and you want it to be more convenient,” says Kropp. “Is no longer a gym, but a mail room where Online orders can be delivered.” And one more thing: These young buyers can pay in cash, what you Negotiate with the seller an advantage over those that have to Finance with a mortgage.

How much the tech scene is shaping the real estate market, also shows in the sales statistics in the past year. The median price for a detached house has doubled since 2013. Around 5600 of real estate changed hands, including 2200 single family homes. Thereof according to was purchased, the market research company Compass more than half of Software engineers. Almost more difficult than Purchase the Hire. 1-bedroom apartments cost per month in the center between 3500 and 3700 dollars. The town carries on with its settlement policy and generous tax breaks for young companies with a certain degree of responsibility. But also the companies themselves nourished the Faith in a market that will only create winners.

The bubble is not far

Not many of the employees of Uber or Airbnb are afraid that the prices might correct once, said Ryan Cole, investment Manager of Citrine Capital, the “New York Times”. This Generation of potential millionaires is a guess, the chances of success of your company is particularly optimistic. “You don’t really understand that the shares of tech firms are very volatile. In addition, the supervisor to confirm they are still in their rosy vision of the future of the company, in order to motivate you to harder use.”

for example, Uber and Lyft are still highly unprofitable. “Nothing in the documents of Lyft and Uber shows how you can solve this Problem,” says transport expert, Hubert Horan, “absolutely nothing”. But all the more beautiful, the illusions are, like those of Lyft co-founder John Zimmer. Three years ago, he thought about a future without a driver made of flesh and blood, and assured faithfully, 2021 already Lyft will be able to do half of the journeys with Autonomous cars.

Still have not reached the market, the speculative stage, says Kropp. “Supply and demand are roughly in balance. But it feels as if we are experiencing crazy months and the bubble could burst.”

(editing Tamedia)

Created: 26.03.2019, 13:58 PM