Are you a homeowner who’s eager to sell? Or are you a renter – newly priced out of your neighborhood of choice?
With recent, massive IPOs such as Facebook (and Groupon prior to that), new tech millionaires are flooding the already sizzling Silicon Valley housing market. The tech boom’s effects on the Bay’s housing supply are plentiful; a recent New York Times article covers the fear of already high prices that are set to soar.
Buying vs renting has always been a local complication. Given high mortgages, layoff concern, lack of options/space, etc. often result in long-term renters who would otherwise be homeowners. This creates a negative trickle-down effect for all potential tenants. Families and other (former) potential buyers drive up competition for rental homes and larger apartments, which in turn churns competition down to the tiniest rental property. Even those willing to pay astronomical rental prices for tiny spaces aren’t guaranteed they’ll win the property. I’ve been on my fair share of apartment “appointments” only to realize I’ve been duped into the dreaded open house where potential tenants awkwardly battle to show their interest and suitability.
On the flip side, many Silicon Valley homeowners are giddy to sell and the payout makes moving a non-issue. Sellers have the upper hand to capitalize on new millionaires’ desire for a quick commute and hot neighborhood. Not only are sellers likely to get their asking price, but bidding wars could ensue given the sheer number of new millionaires (a thousand!).
Let us know how you’ve been affected – has the IPO activity worked for you or against you?
Check out Rand California for local housing stats vs national reports for more info.