Impact of SpaceX IPO on Southern California Real Estate
A recent report suggests that the influx of new billionaires among SpaceX employees, thanks to a groundbreaking initial public offering (IPO), will significantly affect the real estate market in Southern California.
SpaceX’s shares opened at $135 on June 12, and at one point, they exceeded $200. This surge led to the creation of nearly 4,400 new billionaires, additionally marking Elon Musk as the world’s first trillionaire.
Even though SpaceX has shifted its headquarters to Texas, it still has an active engineering and production facility in Hawthorne, located in Los Angeles County, with around 7,660 employees.
Concerns about a possible spike in property prices have been voiced, particularly with reports of inquiries for homes exceeding $5 million in areas from Hawthorne to Manhattan Beach, Venice, and Santa Monica, according to a real estate agent in Hawthorne.
A broker noted that many buyers are indeed looking, often willing to spend $5 million or more. Another agent expressed a mixture of optimism about rising prices while questioning their sustainability, suggesting that while prices may increase initially, ongoing growth isn’t certain.
Currently, the median price for single-family homes in California stands at $930,260, the highest in the nation, while Los Angeles County’s median is around $999,000. SpaceX’s stock has dipped to about $164, but it remains nearly 21% above its IPO price, ensuring that employees will still earn beneficial dividends.
However, most SpaceX shareholders are facing a “lockup” period, prohibiting immediate sales of their shares. Instead of the usual 180-day restriction, those holding pre-IPO stock can only sell based on a staggered schedule determined by the company.
Real estate expert and UCLA lecturer Paul Habibi commented that it might take some months for the housing market to fully absorb the influence of SpaceX’s IPO.
Among the new billionaires, Corey Weiss from Douglas Elliman is reportedly eyeing a $32 million property in Brentwood.
