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Facebook Causing Massive Local Real Estate Bump?

Social networking giant's expansion reportedly driving up real estate prices in Palo Alto.

Home prices in Palo Alto have skyrocketed up to 60 percent in the last six months due in large part to Facebook's expansion, according to Business Insider.

That jump was based on the testimony of a local home owner, and is not an official estimate, but the homeowner pointed to a recent sale on Lincoln Avenue that jumped from $1.6 million to $2.1 million as evidence of the trend.

Facebook employees are swarming the real estate market, often offering to pay cash and going out of their way to let sellers know where they work, according to Business Insider.

Patch columnist Lisen Stromberg experienced this firsthand herself, writing about an incident in April 2011 in which a senior Facebook executive's agent . Stromberg offered it to him for $6 million.

"Without even batting an eyelash, he said, “I’ll talk to my client and let you know.” Then he walked off to find the next willing seller, said Stromberg.

Facebook's IPO is certainly adding pressure to the home-buying situation, according to a realtor in Menlo Park who spoke to the Mercury News.

"What we're seeing is just the possibility of a large IPO is creating a real sense of urgency in our market, both for buyers and for sellers," Omar Kinaan, of Re/Max Distinctive Properties in Menlo Park, told the Merc.

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commuter March 07, 2012 at 06:26 PM
I've been getting calls from real estate agents almost every day. I should ask for $6 million, too.
Joe March 07, 2012 at 07:40 PM
Aaron, I agree with the sentiment of your story. The market has become hot even in our sleepy part of Palo Alto. But "testimony of a local home owner" seems a little over the top! Did you actually put poor Lisen under oath? As a loyal Patch reader, I appreciate your dedication in guaranteeing the veracity of your sources!
Aaron Selverston March 08, 2012 at 08:46 AM
Ha! I see what you mean. Actually, the "testimony of a local home owner" refers to the one quoted in Business Insider. Lisen happens to be another home owner entirely. Both of them experienced the same thing, though.
Cupertino Voice March 10, 2012 at 12:10 AM
I think going from $1.6M to $2.1M is more along the lines of a 31% increase. There are occasions when a property is conservatively priced based on comparable sales a few months back or prices from 2003, 2004, 2005, etc. When the market moves up rapidly, there is no easy way to determine what the pending sales are doing (selling over list price) until they close. Rumors abound and the last thing a seller wants to do is overprice themselves and sit on the market. It creates a poor impression with buyers and will impact the final sales price (negatively). The article is correct that things are hopping but it's a lot more than just Facebook . . .

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