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Jed Kolko, Trulia.com chief economist, on why prices for homes in the Bay Area near Facebook headquarters are being fueled by Facebook’s newly-minte...
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-- OK -- let's talk more FaceBook you know all of those FaceBook millionaires newly minted pushing real estate prices higher jet called -- is chief economist.
Trulia dot com and he joins us now Jeff thanks for being with us you know -- read read your note here that -- -- FaceBook IPO -- -- is a big day for Bay Area.
Real estate why is that.
That's right to the FaceBook IPO.
Is fueling the rise in prices that were already seeing any area right around FaceBook.
But I look at the ten mile circle right around Facebook's campus called FaceBook metropolitan area prices for homes that aren't even up half percent and a half.
Vs a year ago and rents are actually up 12%.
Vs a year ago that faster than the Bay Area and -- the US as a whole.
Yeah that's right and even if I'm a newly minted millionaire and FaceBook and I -- I wanna buy in the Bay Area up.
Are you sure that's a good asset class for me to put money into it's gonna go up more in the next five years -- stocks well.
So what we -- in the Bay Area is right now the problem that we always -- which is it's so hard to build new housing in the Bay Area when you have.
Facebook's IPO when your job growth more generally you have more money chasing pretty much the same number of homes.
That means that when you have more money to spend on real estate from a big IPO we're gonna see prices go up.
In other places if there were big IPO in Texas or North Carolina.
-- see more construction activity because it's easier to build in those markets prices wouldn't go up as high.
But the economy would expand but in the Bay Area the actions almost always on the price side night.
Of the -- all the supply and demand taken hold there and also do uncertain nearby towns or cities lose because FaceBook.
Group.
It is gaining you say gotta be San Francisco they're down zero point 2% vs a year ago there.
Asking price.
If -- would actually seen in the past few months prices even in San Francisco antennas are also going up.
So the FaceBook IPO effect will spill over through the whole Bay Area and because there's so little housing available.
-- inventories are shrinking.
FaceBook employees and investors might look even farther afield and push up homes across the Bay Area.
All right thank you Jen called -- that's a great thing about wealth creation guy she got a celebrated -- -- Well let's -- -- a trip that's out west.
