A couple of months ago I wrote about the relationship between IPOs and home prices. It was in response to the current wave of tech companies — most of which are headquartered in San Francisco — that have gone public or are expected to go public this year (2019). What impact will this have on the city’s housing market?
I cited this academic study on the topic, which already discovered a “positive and significant association between local house price changes and firms going public.” But today I stumbled upon another interesting study by a San Francisco real estate agent, name Deniz Kahramaner, who happens to also be a Stanford-trained data scientist.
What Kahramaner wanted to figure out was, who tends to buy residential real estate in San Francisco?
So he started with title data and then scraped the internet to try and match up individual buyer names with specific companies and industries. Since not everyone has some sort of public profile and because real estate is sometimes held within a company, he was only able to traceback about 55% of home purchases in San Francisco last year.
Still, the data looks pretty clear. About half of the homes bought in 2018 were by individuals whose employment has roots in “software.” The next biggest buyer segment was “finance.”
The other interesting thing about this data set is that it shows where people have been buying (at least last year). Historically, the north end of the city has been the wealthiest, but the above data shows things moving in a southeasterly direction. Though, it remains to be seen what all of this will look like when the dust settles after this current crop of tech IPOs.
Chart: The Atlantic