People who have made it rich in technology and social media are buying mansions in the San Francisco and Silicon Valley area since that is where the businesses are sourced. In 2012, thirteen transactions for over $10 million each were publicly recorded for neighborhoods like Pacific Heights, Presidio Heights and Sea Cliff per the DataQuick research firm, and those are just in the city limits. In 2011, there were only six such sales.
According to Bloomberg, in 2012 in the Bay area, initial public offerings raised $17.5 billion. Sales by Menlo Park-based Facebook Inc., Yelp Inc. (YELP) in San Francisco and Workday Inc. of Pleasanton more than doubled the $8.3 billion in the dot-com heydays of 1999.
Examples of some mansion buyers are:
- The Twitter co-founder, Jack Dorsey, paid $9.9 million in February 2012 for a Sea Cliff two-bedroom house listed at $12.5 million.
- The founder of online game maker Zynga Inc., Mark Pincus, paid $16 million for a Pacific Heights house in July 2012 listed at $16,500,000.
- The developer of six million square feet of Silicon Valley offices and Google’s Sunnyvale four-building complex, Jay Paul, paid $28.25 million in December 2012 for a house in Pacific Heights.
- The Yammer founder, David Sacks, paid $20 million, based on the paid transfer tax, for an unfinished home in Pacific Heights that was once listed at $65 million. The home was previously owned by the founder of the University of Phoenix, John Sperling, who bought it in 2002 for $32 million. Check out the website for pictures and info about this unusual home. Sacks sold Yammer, a social media company, to Microsoft in June for $1.2 billion.
Reasons for the recent increase in mansion sales besides the new millionaires created by social-media and Internet firms growth are:
- the prices are relatively low since many of the homes are decades old needing costly renovations
- In November 2012, prices for homes and condominiums in the Bay area increased nearly 21 percent from the prior year reaching a median $438,000, so prices are rising
- 32,400 new jobs in 2012 have created a housing demand, bolstering the area’s housing market as a whole
- 2013 will bring higher capital gains taxes.
For those in the United States one percent, being auctioned the weekend of December 29th, 2012 is a new waterfront 15,000 square foot mansion, listed in January 2012 for $45 million and now with a starting bid of $25 million. It has 1.14 acres with a Golden Gate Bridge view, two wings on three levels, seven bedrooms and living area with mahogany flooring, nine bedrooms tiles with marble and limestone, terraces of fossil stone from India reached through oversized folding doors. To make the other 99 percent feel better, the website says “A portion of the proceeds will be donated to Red Cross Hurricane Sandy relief efforts and a charity of buyer’s choice.” As developer Jeff Paster says, “It is like a Picasso.” Watch the attached video or view the website.