The home buying clout of San Francisco's AI workers
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OpenAI and Anthropic employees could theoretically buy nearly one-third of the San Francisco metro area's homes if both companies go public at their expected valuations, a new Redfin analysis shows.
Why it matters: It's a striking illustration of how much purchasing power could enter a housing market already defined by scarce inventory and fierce competition.
By the numbers: Former and current OpenAI employees could theoretically buy about a fifth of all residential real estate in the San Francisco metro, based on Redfin's estimate of roughly $135 billion in post-tax equity.
- Anthropic employees could account for another 9% of the market with an estimated $63 billion.
- Combined, that's enough buying power to cover about 29% of the metro's $692 billion housing market, based on Redfin's estimate of the total value of all homes in 2024.
The big picture: Both companies could go public with reported valuations around $1 trillion.
- Local home prices are already climbing at their fastest pace in years as highly paid AI workers compete for a limited number of listings.
- Some properties are selling for more than $1 million over asking as buyers race to get into the market before the anticipated AI windfall arrives, the Wall Street Journal reports.
Between the lines: Some OpenAI and Anthropic employees have already unlocked some of their wealth through secondary share sales, company tender offers and loans backed by private stock, giving them cash to buy homes before an IPO, per the New York Times.
- That's a departure from previous tech booms, when employees typically had to wait months after an IPO for lockup periods to expire before accessing their equity, San Francisco real estate agent Karen Mendelsohn Gould tells Axios.
- "This is one of the first times this has ever happened,"she says. "It was a big surprise that they were going to be able to get access to their money before the companies went public."
The intrigue: The frenzy has become so intense that some home sellers are marketing properties with an unusual pitch: they'll consider accepting pre-IPO stock as part of the purchase price.
Yes, but: Don't expect that to become the norm, real estate broker Danielle Lazier tells Axios.
- "It's hard to imagine more than a handful of outlier sellers wanting stock shares over cold hard cash," Lazier says, comparing it to the short-lived push to buy homes with Bitcoin.
Plus, those deals remain rare and face significant hurdles because restricted stock can't be transferred before it vests or without company approval, Mendelsohn Gould says.
The bottom line: In real estate, the expectation of AI wealth may be proving almost as powerful as the wealth itself.