A flood of new San Francisco homebuyers in 2019

San Francisco tech workers are about to get a lot more liquid in 2019.

Uber, Lyft, Slack, Airbnb, and Pinterest each announced 2019 IPO plans. Each are “decacorns”, which means they are valued over $10B. Each are headquartered in San Francisco.

Juul, another SF-based decacorn, just announced a $2B dividend for its 1,500 employees. This works out to an average of $1.3 million per employee.

Something like 10,000 or more tech work will become liquid millionaires in 2019. Many will be looking to buy their first home or trade up to something bigger.

San Francisco is a very attractive place to live. High wages, exciting jobs, pleasant climate, great nearby universities, natural beauty, culture, amazing restaurants, safety, outdoor activities, etc. It’s one of the great “consumer cities”, like London or New York, where people pay a lot extra to live.

In my (biased) opinion, San Francisco is the greatest city in the world.

Over the last two decades, the price of SF real estate has gone up dramatically. This is due to a combination of robust demand (booming tech economy, high quality of life) and slow growth of the housing stock (limited land, strict anti-development building codes).

We need more housing supply to moderate prices. This would keep more diversity in the city and allow more people to benefit. I believe the city should encourage more development and upzoning, especially around Golden Gate Park. Imagine a more vibrant, modern, taller park neighborhood, instead of the aging ones that exist today. Unfortunately, this is very unlikely to happen.

While the economy may turn to recession and/or these IPOs may get postponed, there’s a good chance 2019 will be another seller’s market for San Francisco homes.