The IPO Effect on the Bay Area Housing Market

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Nov. 15 (Bloomberg) -- Redfin CEO Glenn Kelman discusses the IPO effect on real estate markets in the Bay Area. He speaks with Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Silicon valley real estate.

The brokerage company quantifies market trends in the bay area.

Cory johnson bristly second down with glenn kelman started by asking if there is an ipo on the housing markets.

There is, just delayed.

Every body, as was there as an ipo, they rush and buy property.

It is true they start looking, but they have a lockup and after , we found it is about a year.

If you look at the price of housing around google's campus or around facebook's campus, there's the fact you have to wait 12-18 months for it to show and prices.

You have done the research and seen the numbers.

We have.

We serve silicon valley, the high tech the brokerage for many clients.

We know that when there is an ipo at twitter or facebook, eventually many of the folks will work with us.

We wanted to understand -- understanding quantified way.

What is the effect?

Are they more casio, a rush?

-- are there more cash deals, a rush?

Whether there are more cash deals.

Some people not as price- sensitive.

You have to be an absolute well.

If there's an $800 million ipo, we cannot find any effect and how -- in housing prices.

When you get a $10 billion ipo, you definitely see effect.

That is where the twitter ipo is going to effect the san francisco market.

When you have a market ally san francisco were the inventory is constrained and there is more wealth like in texas, they plow under a new development.

Here, they are not making more single-family homes.

Only place for prices to go is up.

What makes housing?

Bill gates was that the problem with being a billionaire is -- cannot raise prices fast enough.

If you have a lot of money, you can get a nice suit or pair of shoes.

One of the only things that you can buy that is really going to be something you can only afford when you have $10 million is a very nice house.

That's the ultimate luxury purchase, aspirational purchase.

Most people on twitter probably will not make $10 million or $1 million a month i wonder if those people are looking at real estate -- million, i wonder if those people are looking at real estate.

A way to look at the company and terms of real estate.

And you are going to buy a house and think you're company is going to go public, you wait.

They usually last six or 10 years.

Before you make a compromise and take a three bedroom house instead of a four bedroom and buy in walnut creek instead of berkeley or oakland, you say, let's see where the chips fall.

Where the ipo goes.

Part of what is happening is a lot of folks are probably waiting a long time to buy a house because they did not know how much of that will work.

It is a huge x factor trying to determine if it's a $30 billion ipo.

You guys just raise a new round from some pretty big-name investors as well.

We raise 50 million dollars from tiger.

Some the best money you can find.

They wanted to build a long term position.

They think this can be a company that can be worth tens of billions of dollars.

We are trying to put the customer first and we use technology.

It is a much broader approach than just focusing on display and pretty pictures on a website.

That was redfin ceo.

This text has been automatically generated. It may not be 100% accurate.


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