On Monday, Anthropic submitted its much-anticipated IPO application, which could very well become one of the largest in history. Meanwhile, the luxury real estate markets in the San Francisco area are gearing up for significant business from new AI employees and early investors.
Redfin agent Kelley Krock shared insights with The Post, noting, “Their budgets just keep expanding the longer they look, simply because the valuations of their companies are increasing, which enables them to spend more.”
For one member of a leading AI firm, the ideal home was secondary to simply having available funds. He had quite a bit to spend.
“I mentioned I wasn’t entirely convinced this was the right house for him, and his reply was that it didn’t particularly matter since he could always turn it into a rental later,” Krock recalled.
A Redfin analysis conducted in July projected that current and former employees of Anthropic and OpenAI could potentially have a combined after-tax equity of $198 billion, which makes up about 29% of the residential property value in the San Francisco metro area.
“People are already starting to spend that money they expect to receive,” remarked Chen Zhao, Redfin’s head of economics research. “The tendency to pre-spend before an event tends to be just a fraction of what follows once the actual event takes place.”
With San Francisco already ranking among the priciest rental markets in the U.S., those without shares in AI companies may face an even tighter situation. The median rent in the city has surged to $4,560 per month, which is about $965 higher than the previous year, according to Zumper.
“The Anthropic IPO and similar offerings will just make it more difficult,” Sam Moss, executive director of Mission Housing Development Corporation, told ABC7, emphasizing that “most of us can’t afford houses as it is.”
Wealthy buyers in various sectors are already working to secure properties ahead of what Krock predicts will be a significant influx into the market. “They are quite strategic, trying to get contracts or purchases lined up now before this expected surge makes things even more competitive,” she added.
The current frenzy in housing is already leading to significant overbids. Recently, an eight-bedroom mansion at 20 Cherry St. in San Francisco’s Presidio Heights sold for $28.5 million—$10 million over its $18.5 million listing price, just 20 days after going on the market, according to MLS records.
On another front, yacht dealer Jeff Brown reports that business is thriving on the water. His Sausalito store has achieved record-breaking sales over the last couple of years, with buyers linked to Anthropic and OpenAI among them.
Popular among tech enthusiasts are Axopar adventure boats, which typically range from 37 to 45 feet and are priced between $350,000 and $800,000.
“They’re utilizing them daily,” Brown said, drawing a comparison between the boats and “a Range Rover on water.” He mentioned that customers use them for commutes, sports events, and dining outings.
His company sells a broad range of yachts, from $350,000 to $54 million, with many transactions falling between $2.5 million and $6 million.
With over 40 years in the business, Brown remarked that buyers associated with AI tend to come well-informed. “They arrive having done their homework, already focusing on specific boats or experiences they desire,” he noted, describing them as well-prepared and knowledgeable.
Having wealth doesn’t necessarily mean they’re careless with their expenditures. “They are shrewd negotiators, avoiding unnecessary spending and not rushing their decisions,” he explained. “It’s a very methodical process for them.”
For newcomers to yachting, Brown’s company provides training. Modern technologies make operating these boats straightforward, especially appealing to tech-savvy individuals.
“You operate them with a joystick, much like a computer,” Brown explained. “So if you can use a computer or play games with a joystick, driving these boats is quite manageable.”
There are even customers who turn to chatbots for assistance in navigating their vessels.
Whether purchasing yachts or homes, those with ample cash sometimes don’t fit the typical wealthy stereotype. “They might have holes in their jeans or wear their hats backward,” Krock said. “They’re really just like everyone else, thankful to have landed in the right place at the right time.”
