Princeton Capital Blog

IPOs Affect the Bay Area Real Estate Market

December 2nd, 2011

Recent successful start-ups becoming IPOs in the Bay Area have improved the real estate market in San Francisco. According to Reuters, San Francisco home prices, especially those in the southern neighborhoods, have benefited from these IPOs.

Tech companies such as Twitter, Zynga and Yelp based in the area have reignited the tech-related identity of the area. Not only are employees suddenly made richer by the IPO, but this tech-hub identity has returned to San Francisco, which it hasn’t truly grasped since the dot-com era.

Competition for modern homes in the southern San Francisco neighborhoods has risen home prices. According to the San Francisco Chronicle, the rise in prices is for three main reasons.

“First, we have the new crop of millionaires finally able to afford what they want from the San Francisco real estate market, all competing against each other. Next, we have the upcoming crop, such as those who stand to make millions from Zynga and Yelp IPOs, about to enter the playing field, making those home-seekers already on the field more nervous–compelling them to bid now, buy now.”

Finally, current homeowners in the area are holding on to their property as they see it rise in value.

Do you think this real estate boom due to successful tech IPOs will continue?

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