A large portion of IPO-enriched home buyers will seek houses away from the city. Regardless of the stereotypes, not all San Francisco tech workers are young, city-dwelling millennials living nearby. The immediate home impact of this IPO windfall will extend in all directions: South across the San Francisco Peninsula, north across the ferry lines to Marin County and east to the I-680 corridor beyond Oakland and Berkeley. Along with also the impacts — those who happen if and when people selling to buyers utilize the proceeds to create another house purchase — will extend diffusing the IPO windfall’s housing component throughout the region.
But does this mean house buyers will descend on the City of San Francisco in 2019 and invest $200 billion on houses? Certainly not, for several reasons.

At best, these workers that joined more recently will have just a portion of the entire equity grant available to market this year, decreasing their immediate purchasing power (and when the past is a good indication, many will not stay long enough to see the full equity ban vest). In addition, many workers obtain their equity in the form of stock options, and for all but the oldest employees the strike price is not negligible, i.e. an employee exercising an alternative and selling $100 worth of stock will normally pocket much less. Workers must pay tax on their own IPO windfall, keeping another piece of it.
** To put that $200 billion amount into perspective, consider that just a small fraction of that wealth will find its own way into the housing market — for the reasons spelled out here — and as of 2018, residential property in the Bay Area was worth a total of roughly $2.38 trillion.

Lyft’s recent offering, along with a collection of anticipated IPOs this season — headlined by Uber, Airbnb, Pinterest, Slack, Zoom and many others — has motivated numerous alarming headlines suggesting a coming flood of stock-enriched property buyers.

IPOs are just one of several ways in which riches arrives in the Bay Area.

Not everyone getting an IPO windfall will purchase a home. Those driven from the windfall to buy a house in the upcoming few years — and that wouldn’t have done so otherwise — are probably a tiny subset of the entire employee pool. Suppose each and that they number 5,000 purchases a house That’s about 2 percent of those 243,575 homes. Also: Some of the firms’ workers own homes already. And some workers might not want to buy a house: Maybe their personal life is in regular, possibly they value the freedom of renting or perhaps they would love to utilize the IPO money for other purposes (ever dream of bootstrapping a startup?) .
The short-term fears of an IPO wave flooding San Francisco with cash are overblown, but the long-term anxieties of the Bay Area neglecting to adapt people and growing unaffordable to all but the most affluent — those fears are extremely real.