Employees benefitting from SpaceX stock surge could lead to boom in LA luxury real estate market
Real estate experts say luxury homes in the Los Angeles area, specifically in the South Bay, are expected to be in demand as thousands of Hawthorne-based SpaceX current and former employees will see a windfall of profits with the company's recent stock market debut.
The Elon Musk-controlled company completed the largest initial public offering in history last month, creating over 4,000 new millionaires among SpaceX employees.
Shares, which opened at $150 on June 12, closed at $160.95, up 19% from the IPO's $135 offer price, according to CBS News. The stock peaked at $176.52 in intraday trading, a gain of nearly 31% from the offering price.
"Well, this is a pretty significant wealth event for Southern California. You have thousands of millionaires coming into the market and various aspects of wealth," Real Estate Agent Cory Weiss said.
"I think first things first is if an engineer is making millions of dollars, they're gonna pay off some debt, sure. Then they're gonna look for a better home for their family before the Ferrari."
The disbursement of funds from the stock will be gradual, so wealth will come over time. Weiss said he anticipates that real estate in South Bay communities such as Manhattan Beach and Redondo Beach will be most affected.
"We've seen an uptick in Venice, as well as Silicon Beach, is what they call it. High-end, we've seen some of the high-end executives look at … Brentwood Circle, they're starting to pick out things they like," Weiss said. "It's really changing a lot of people's lives."
He said there's a lot of negotiation in the South Bay, and "it's going to be competitive and very tough." Weiss said he does not believe the SpaceX wealth will change the real estate market in the long term.
"I think this is over a couple period of a couple years, and that people have known this was coming for a long time. I don't think this will be in three to five years still topic of conversation," Weiss said.
