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If most 2019 Bay Area IPOs succeed, some say this will introduce over 10,000 new millionaires to Bay Area [0]. And most of them are unlikely to leave and quite

by rixrax 8y ago

If most 2019 Bay Area IPOs succeed, some say this will introduce over 10,000 new millionaires to Bay Area [0]. And most of them are unlikely to leave and quite a few will likely want to have a house. I can only guess how this will impact house prices. [0] https://www.google.com/amp/s/www.dailymail.co.uk/news/article-6790069/amp/Experts-predict-10-000-new-millionaires-San-Francisco-Uber-Lyft-public.html https://www.google.com/amp/s/www.dailymail.co.uk/news/articl...

randomacct3847 8y ago
California makes it very expensive to stick around since you pay a lot of income tax if you sell. Of course some will stay but a low 7 figure windfall pre-tax will not get you much house, especially if you need a bigger house to start a family, and many will be tempted to not pay a state income tax by moving out of state.
- toast0 8y ago
  Depending on what form your equity takes, California may still tax you if you leave. For ISOs, it's relatively simple, if you're a resident at the time of the Federal taxable event, it's a California event. For RSUs and NSOs, it's California taxable for the portion of vesting that is California sourced: the time where you were a California resident, or working in California. (Caveat: the rules are vague, you're required to use a reasonable method of apportionment and work days is documented as a reasonable method)
  - randomacct3847 8y ago
    Yes, mostly relevant for earlier employees of these companies that were awarded options that they’ve exercised but have not sold their shares (the taxable event)
JMTQp8lwXL 8y ago
So that's 10,000 people and the city SF Bay Area has 7.15 million, and 880k live in SF proper. It doesn't sound like it'd make a very big dent in prices.
- beamatronic 8y ago
  What’s the float though, the number of homes for sale?
  - deathanatos 8y ago
    https://sf.curbed.com/2019/1/2/18165468/san-francisco-home-sales-drop-numbers-2018-figures https://sf.curbed.com/2019/1/2/18165468/san-francisco-home-s... About 2 years worth of new millionaires.
    - beamatronic 8y ago
      I think of the housing market here largely as “the latest crop of FAANG/unicorn millionaires duking it out to get the best schools for their kids”
  - steve_avery 8y ago
    sfgate reported that only on the order of like 5600 single family residences were sold in SF proper in 2018
- gnicholas 8y ago
  Still, introducing 10k new millionaires will make a difference. How many multi-million dollar homes are potentially for sale? Also consider that if someone is selling one such home, unless they're leaving the area or offloading an investment property, they're likely trading up (which means there's not a net change in the number of available multi-million dollar homes.
  - dsl 8y ago
    As a millionaire, I still can't understand how people buy houses here. You are dumping all of your money into a vastly overpriced asset (vs the rest of the country), with the hopes that in 30 years the valley will be minting multi-millionaires to buy you out so you can retire.
    - 8y ago
closeparen 8y ago
What's the methodology behind 10,000 new millionaires? In the community of rank and file engineers at unicorns, as I understand it, most people are expecting high five figure to low six figure windfalls. Will there be millionaires among very early employees and/or the C suite, sure, but that's maybe a couple hundred people at the largest companies.

by rixrax 8y ago

randomacct3847 8y ago

California makes it very expensive to stick around since you pay a lot of income tax if you sell. Of course some will stay but a low 7 figure windfall pre-tax will not get you much house, especially if you need a bigger house to start a family, and many will be tempted to not pay a state income tax by moving out of state.

toast0 8y ago
Depending on what form your equity takes, California may still tax you if you leave. For ISOs, it's relatively simple, if you're a resident at the time of the Federal taxable event, it's a California event. For RSUs and NSOs, it's California taxable for the portion of vesting that is California sourced: the time where you were a California resident, or working in California. (Caveat: the rules are vague, you're required to use a reasonable method of apportionment and work days is documented as a reasonable method)
- randomacct3847 8y ago
  Yes, mostly relevant for earlier employees of these companies that were awarded options that they’ve exercised but have not sold their shares (the taxable event)

JMTQp8lwXL 8y ago

So that's 10,000 people and the city SF Bay Area has 7.15 million, and 880k live in SF proper. It doesn't sound like it'd make a very big dent in prices.

beamatronic 8y ago
What’s the float though, the number of homes for sale?
- deathanatos 8y ago
  https://sf.curbed.com/2019/1/2/18165468/san-francisco-home-sales-drop-numbers-2018-figures https://sf.curbed.com/2019/1/2/18165468/san-francisco-home-s... About 2 years worth of new millionaires.
  - beamatronic 8y ago
    I think of the housing market here largely as “the latest crop of FAANG/unicorn millionaires duking it out to get the best schools for their kids”
- steve_avery 8y ago
  sfgate reported that only on the order of like 5600 single family residences were sold in SF proper in 2018
gnicholas 8y ago
Still, introducing 10k new millionaires will make a difference. How many multi-million dollar homes are potentially for sale? Also consider that if someone is selling one such home, unless they're leaving the area or offloading an investment property, they're likely trading up (which means there's not a net change in the number of available multi-million dollar homes.
- dsl 8y ago
  As a millionaire, I still can't understand how people buy houses here. You are dumping all of your money into a vastly overpriced asset (vs the rest of the country), with the hopes that in 30 years the valley will be minting multi-millionaires to buy you out so you can retire.
  - 8y ago

closeparen 8y ago

What's the methodology behind 10,000 new millionaires? In the community of rank and file engineers at unicorns, as I understand it, most people are expecting high five figure to low six figure windfalls. Will there be millionaires among very early employees and/or the C suite, sure, but that's maybe a couple hundred people at the largest companies.