Headlines were made when Facebook announced its plans to go public, creating a new generation of Facebook millionaires. Many have been speculating about what these fresh-faced millionaires will do with their money. Others have been asking how they will affect the housing market.
“It will be some time before the first Facebook shares are sold to the public, and even longer before Facebook’s employees are able to turn their paper wealth into cash and officially take their places as the newest members of the 1 percent. But the mere anticipation of the event may pour a little kerosene onto what is already a fairly hot local real estate market,” wrote Michael Cooper in an article published on the New York Times online on February 8.
The market Cooper is discussing is the San Fransisco Bay Area, the location of Facebook’s headquarters, where it is assumed these newly minted millionaires will be purchasing property. Sellers want to know if they should sell now or wait; buyers currently searching for properties are hoping to close on a house before the IPO hits, sweating rising prices as competition for the best properties escalates.
Recently, the Wall Street Journal wrote that home values fell at the end of last year in a majority of the Bay Area. Even with this dip, the area still has one of the hottest markets in the country, and things look as if they will heat up even further once Facebook’s new millionaires begin house-hunting.