Facebook employees ‘like’ Palo Alto housing market

Wednesday, May 09, 2012

Facebook employees ‘like’ Palo Alto housing market

The property market in Palo Alto, California is growing faster than anywhere in the USA thanks to a phenomenon dubbed 'the facebook effect'

Within weeks, a large number of facebook employees and share holders are expected to become overnight millionaires as the company is floated on the stock market. And despite the fact that the number of prospective home buyers with Facebook connections makes up a tiny fraction of the area's property market, their psychological effect on the market is unmistakable.

Local real estate agents and those looking to sell their properties are bumping up prices in anticipation of the employee windfall, creating a mini housing bubble in the area.

The average price of a single-family home in Palo Alto increased by 11 per cent in the first quarter of 2012; compared to the national rise of 12.8 percent across 12 months, offering the highest quarterly price growth in the whole country.

Sellers are also withholding their properties from the market until after the valuation in order to achieve the maximum price for their sale meaning that the amount of property currently for sale in Palo Alto has decreased by around 57%.

Local realtor Michael Dreyfus commented "The locals are all gaga over Facebook and how much their houses are going to be worth and every real estate agent in town has a long list of buyers. You can almost feel the preparation for a spring frenzy. The hordes of buyers are going to overwhelm our meagre supply.”

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