This month’s historic, $85 billion SpaceX initial public offering is expected to drive a luxury housing boom in Los Angeles, where Elon Musk’s rocket company has a large base of operations.
The stock sale, which temporarily made Musk the world’s first trillionaire, is projected to mint at least 4,000 new millionaires between current and former employees.
Within this group, about 400 could net more than $100 million from the stock offering, the largest in U.S. history.
All that new wealth is already driving interest in luxury home purchases, often by the beach, around Los Angeles and the surrounding counties, realtors told The Los Angeles Times. That’s good news for sellers and state tax rolls, but it comes with complications.
“A place like Manhattan Beach has roughly 11,000 housing units, so there could be a pretty significant impact if a lot of those folks decide that they want to go buy houses in those neighborhoods that have such a supply constraint,” UCLA Anderson School of Management lecturer Paul Habibi told the newspaper. “Those markets are already among the priciest in Southern California and I can only imagine that will continue with this new wealth creation.”
Others told the paper they’ve been hearing from buyers tied to SpaceX seeking beachside dream homes with pools or spreads with numerous bedrooms.
The company, which has offices in Hawthorne, California, is also expected to drive a real estate buying spree in South Texas, which is home to SpaceX’s Starbase complex.
These SpaceX hubs aren’t the only places experiencing a sudden, tech-inflected wave of real estate activity.
The artificial intelligence boom is driving what one real estate agent called a “thermonuclear wealth explosion” in the San Francisco housing market, The Independent previously reported.
The upcoming IPOs of Anthropic and OpenAI are expected to further increase competition for luxury homes.
In San Francisco, which has long struggled with affordable housing, the median home price topped $2 million in March, and bidders regularly pay more than $1 million above listing prices for houses that, in most other places, would be unremarkable single-family homes with a few bedrooms and small backyard.
The city has both the highest and fastest-rising home prices in the country, according to Redfin, while the median monthly price of a one-bedroom apartment is hovering around $4,000.
