With Lyft and Pinterest having already gone public, and several more to come (Uber, Slack, Airbnb, Cloudflare and Postmates), economists are forecasting increases in housing prices in the range of 0.5% to 2%. The bulk of the projected increase can be attributed to Uber.
It seems that everyone in the real estate industry and in our area is talking about this impending IPO situation. It's difficult to say what could happen. On one hand, it feels as though we must be nearing the end of a prosperity cycle. However, in some ways San Francisco feels somewhat insulated, due to how epic, profitable and sustainable the companies are that reside here.
There are many other moving parts: our political climate, the Fed, and interest rates, to name a few. Because of this, waiting to sell may or may not serve you, especially if other sellers are holding out for the IPOs and then the inventory goes up at the same time as demand. Could it all balance out, and end up staying flat? I'd like to hope that prices stay more or less flat rather than drop, but we can’t be certain.
Considering that there are split opinions regarding a new recession, waiting for the IPOs might not help. Many people may be much wealthier a few months from now, but there are other factors that will determine if that increased income exceeds, meets, or falls short of projection (just ask Lyft).
As far as we are concerned, Franck and I are always hesitant to tell our clients to hold off on selling until later if the timing is good and they are ready. My gut says: Sell now or soon! Do not try to time the market. This gets people in trouble. It feels like the very end of the wave we have had to me, meaning that some buying opportunities may be just around the corner. I also feel like there is a LOT of buyer anticipation of the IPOs right now, making it more competitive for those that WON’T benefit from the IPOs, as many of them are trying to buy now. That’s a compelling point for sellers as well. That said, if you are a buyer who is not benefitting from the IPOs: Also please do not let this be a proverbial gun to your head. Buying or selling under duress or in scarcity mode is never a good headspace or situation to be in. Just live your life and do things when it's aligned for you personally and financially. Happy to talk through any of this with you by phone… it is what we do best here at The Costa Group!