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Tech Money Dominates S.F. Housing Market
Alexis C. Madrigal reports on the influence of money from the technology sector on San Francisco’s already tight and astronomically expensive real estate market. Deniz Kahramaner, a data scientist working in real estate, used title-company data to gather information about homebuyers and found that much of the money came from the tech industry, says Madrigal:
Fully 51 percent of them worked in software. They bought in specific, desirable neighborhoods closer to San Francisco’s tech companies, as well as the highways and train lines that lead south into Silicon Valley. They were less likely to buy in the foggy Sunset, which is the worst commute to tech businesses.
A number of IPOs are on the horizon, and the San Francisco housing market could see major impacts from the flood of big money. "[Kahramaner] foresees 3,885 new buyers looking for houses less than $3 million, in a market in which fewer than 6,000 homes total sell per year. At the top end, it gets even crazier—with more than 1,000 buyers looking from $3 million on up," writes Madrigal.
The San Francisco trend of wealth—what Madrigal calls "globally derived, locally applied"—is not unusual today. "But nowhere matches this city’s collision of the dematerialized economies of finance and technology with land, the need for shelter, the concept of home, and a place that so many loved when they could afford to live there."