Silicon Valley braces for Facebook millionaires
As Facebook goes public, Silicon Valley is buzzing in anticipation of the “instant millionaires” that may soon be looking for ways to spend their new-found wealth.
Eight years after Mark Zuckerberg founded the company in a Harvard dorm room, the stock market debut is expected to value the social media giant at as much as $100 billion.
While Zuckerberg and other longtime staffers stand to benefit the most, the initial public offering could also make millionaires out of much of the company’s rank-and-file.
Local real estate agents say they expect the IPO — at $5 billion easily the largest ever by a technology company — to boost already high home prices as newly wealthy staffers at the social media giant begin shopping.
“It’s going to have a great effect,” said Pierre Buljan, a Silicon Valley real estate agent who shows homes to young technology executives. “I believe with 1,000 new millionaires, they’re going to need a place to live.”
Buljan said his typical client often seeks “modern, high-tech structures” close to the airport and good schools. “They don’t like the stuff their parents used to live in.”
Typically clients pay cash for the homes, he said, which can range anywhere from 4,000 to 15,000 square feet (372 to 1,393 square meters) depending on the size of the family.
Real estate agent Dawn Thomas said she is already seeing home prices rise in areas surrounding Facebook’s Menlo Park headquarters and expects that to continue.
“You’re going to have all these instant millionaires on the streets,” Thomas said. “The trickle is already happening.”
Thomas described her tech-savvy homebuyers as “very, very green-minded” and in search of smaller, tech-equipped, energy-efficient homes with high-end amenities. “They don’t want ‘Mcmansions,’ ” she said, referring to super-sized houses that can gobble up energy.
Thomas and Buljan both cautioned that it will take time to see the full effect of the IPO. Facebook shares will not begin trading on Wall Street until later this year.