AI IPO Money Is Coming for Bay Area Home Prices

Here’s a glimpse of what you’ll learn: 

• How AI companies and potential IPOs could impact San Francisco home prices
• Why the Bay Area housing market is showing signs of renewed strength
• The case for buying before the next wave of demand enters the market
• Why some Californians are considering a move to Washington State
• How interest rates and consumer costs continue to affect affordability
• Unexpected homeowner savings opportunities available in San Francisco
• Key takeaways buyers should consider before making their next move

In this episode with Fred Glick

Is the next San Francisco housing boom already being fueled by AI money?

In this episode, Fred Glick of Arrivva breaks down how the AI IPO wave could flow into San Francisco home prices, why the Bay Area may be entering another pricing surge, and what buyers need to know before the next jump. He also explains why some Californians are looking to Washington for better value, how interest rates and everyday costs affect affordability, and where homeowners may be missing out on unexpected savings.

Resources mentioned in this episode

• Fred Glick on LinkedIn
• Arrivva
• Ultra-High Efficiency Toilet Rebate Program

EPISODE TRANSCRIPT

Drew Hendricks (00:00)

Just sitting here with Fred, about to ramp up We Fixed Real Estate. We were having an interesting talk about AI in twenty twenty six. And yeah, it’s easier, but you know what? Now you’re doing ten times as much. So you’re that much more fragmented.

Fred Glick (00:14)

The favorite phrase for everybody will become, that’s so yesterday, dude.

Drew Hendricks (00:21)

Yeah, you pour everything into it and then two weeks later it’s obsolete.

Fred Glick (00:24)

Right. And you know, great startup. Hey, we raised a hundred million based on a billion-dollar valuation. And two weeks later they’re using the money to pay the bankruptcy attorney. So it’s insanity out there, kids. So it’s like, how do you focus on these ideas? Because you keep, especially if you got the kind of brain that just keeps coming up with ideas, which is my biggest problem.

Drew Hendricks (00:40)

It is. Mm-hmm.

Fred Glick (00:52)

And then you get on to one of the AIs and you type it up and you’re all excited and it gives you answers and you do it again and again and again you reprompt it and blah blah blah. And then I gotta wait, I gotta go to this meeting, and then you never come back to it. And then like six weeks later, you’re on a flight and you just start looking down your old things. It’s like, what the hell was this? You look at it, it says, that’s pretty cool. And then you gotta redo it because you know there’s a whole new protocol for doing it. So

Drew Hendricks (01:21)

Yeah.

Fred Glick (01:23)

It makes it a lot of fun, I guess.

Drew Hendricks (01:25)

Like an anthropic, it’s you did it in Sonnet four point six and now op it’s four point eight’s out, and you’re like, “Well, I gotta start over again on this one.”

Fred Glick (01:33)

Yeah. It’s absolutely cuckoo for cocoa puffs. But

Drew Hendricks (01:38)

And that’s what brings us to the topic of today’s podcast. I just read the other day Anthropic has filed for their IPO. I think the valuation’s like nine hundred and sixty billion right now.

Fred Glick (01:41)

Yes, it sure does.

Come on, make it a trillion, make it make it interesting. They make that number up anyway, so yeah. I think, you know, Elon thinks he’s worth eight eighty-two trillion or something. I mean, it’s just silly numbers at this point. It’s crazy. But yeah, so here’s the thing. I’m sitting back thinking, okay, you got anthropic, you got Chat GPT.

Drew Hendricks (01:53)

Well it’s just it hasn’t started yet.

Fred Glick (02:16)

You got SpaceX just just for starters. Plus, plus, plus, plus, plus. So, what’s gonna happen is the IPOs are gonna happen. I don’t ask me for stock advice. Who knows what’s gonna happen with that? It either could skyrocket to the moon or jump and come down and go all over the place. But six months after the IPOs is basically when the people who had worked there, who were given stock.

And have the stock, and now it’s in the stratosphere, are able to sell. This has happened previously on all the big IPOs. So here’s what happens: they sell, they sell enough just so they could buy a house finally. And guess where those houses are going to be bought? San Francisco for starters. That is the main concern.

And yeah, it’s gonna go all the way down the peninsula, but San Francisco’s the hot spot. It’s been 18 months-ish that these prices have just gone up, and there’s bidding wars. And I’m talking about the single-family houses in the nice neighborhoods. You can still even the condos in the embarcadero gone up, not dramatically, but gone up enough. so

The problem is gonna be still, people don’t wanna move. It’s getting better to live in San Francisco. The values obviously are still going up. There’s not gonna be that much inventory, but you’re now bringing on lots more buyers. And guess what happens? The prices go up. So if you’re looking in San Francisco now and you get into one of these bidding wars and you say to yourself, I’m not paying 2.5

For this house. Well, next year it could be 3.5. That’s the issue. So unfortunately, if you’re looking in San Francisco, you’re going to have to overpay a little bit now, but you’re gonna have to pay a lot in a year or so from now, year to 18 months. So this is just the hey, here’s what’s coming. Buy, buy, buy. If you’re gonna do it, do it now. Yeah, the rates.

Drew Hendricks (04:11)

Mm-hmm.

Fred Glick (04:36)

Aren’t that great. Take a five or seven-year ARM. The banks- Wells, B of A City, they all have good arms because it’s their own money. So I i and they can get it done fast and all that good stuff. you just kinda have to jump in and close your eyes. Because if you’re gonna be there long term, yeah, I mean it matters what you pay, but you know, if you’re gonna be there twenty years, it kinda doesn’t matter.

Twenty-year money from now is

Adding another zero on who knows where inflation is gonna take us, and the value of the dollar, but that’s what’s going on. And the affordability in San Francisco is just, you know, Berkeley, another crazy place that everybody overbids on now. That’s gonna go super even crazier nuts with the great school districts. It’s just gonna get harder to own in the Bay Area.

Drew Hendricks (05:13)

Okay. That’s with the thesis that all these IPOs are gonna come out, they’re gonna be successful and that the economy’s not gonna be adversely affected by this.

Fred Glick (05:49)

No. No. There’s plenty of money to spend. There’s plenty of people with money. I’m on this secret email chain thing with real estate agents who have you know they put it in there, hey we have this coming soon or this off market, but they also have buyers that they have that are looking for things. And let me let me just

for fun kids. I’ll read a few just so you get an idea of people who are looking for things.

Let me just get you a couple. Here. Pasadena, buyer in the three to four million, single family, four bedroom.

Ventura, Sherman Oaks, two to three. People looking at Pacific Palisades for six million to ten. In other words, there’s plenty of people with plenty of money.

Yeah,

So as you can see generically, I mean there’s people that ask for property twenty million dollars in Hollywood Hills and there’s plenty of money out there. There’s plenty of people in California with money and that’s what keeps California California. So it it’s it’s yeah. Especially in the Bay.

Drew Hendricks (07:13)

Moral the story is if you’re gonna buy by now.

It’s gonna trickle down ’cause there’s AI facilities everywhere that are gonna reap the benefits of this.

Fred Glick (07:22)

Just gonna get

Yeah, I’m sure there’s remote workers all over the place. But you know, it’s these AI companies, the headquarters for San Francisco. That was a beautiful thing for San Francisco that everybody came there and revitalized it. And the mayor’s doing great stuff. I mean it’s not perfect, but you can never get anything perfect. And everybody will point out the flaws and whatever.

Drew Hendricks (07:58)

That’s good. Well, now that everybody’s made all this money and you was talking about California, you’ve got an upcoming blog post that you’re gonna give us a little tidbit on about why it might make sense for if you live in California to relocate to Washington.

Fred Glick (07:59)

Yeah.

Yeah.

Yeah, there’s I think they said about a hundred and forty people a day that are that move from California to Washington. Now they’re not all home buyers and all that, but the idea is that taxes, you know, they can hurt. There’s yes, there’s no income tax on wages up there. And by the way, if you do move to the southern part of Washington, like in Camus, the interesting thing is you obviously have no

Drew Hendricks (08:29)

Zero income tax on wages.

Mm-hmm.

Fred Glick (08:44)

Income tax, but then you drive over to Portland, which is right across the river, you buy everything that has no sales tax, add the two together, you’re rockin’ and rollin’, saving tax wise. Anyway,

So the idea is we’re just trying to show if you gotta work remote and you know you just wanna beat the taxes, you can deal with the weather. Now it doesn’t rain as much as you think it does, but it’s kind of gloomy. That’s what you gotta deal with. So if you live at the at the beach in California, you’re gonna get, you know, may May

June gloom and all that stuff and early mornings you get the layer the weather layer. So you might be used to it anyway, and it’s a little cooler. So, you know, there’s a million different reasons to move or not move, but take a look at it. there’s a tiny bit of a hair of a slowdown up there, real estate wise, because Amazon and Microsoft announced some layoffs a few months ago. So that’s kind of

Drew Hendricks (09:28)

Mm-hmm.

Fred Glick (09:51)

trickling in a little bit. But, you know, Boeing’s not going to stop making airplanes, that’s for sure. Amazon’s not going to stop doing whatever Amazon does. And who knows Mike who knows what Microsoft is actually doing. But, you know, you can get more real estate for the money. There’s no doubt about that. Bellevue is the Palo Alto of Washington State, but it’s not the Palo Alto prices.

great schools. They only have like a couple bridges and it’s for commuting wise. But if you have to live in your house, big deal. A lot of great bike paths, a lot of great places to go hiking. It’s really nice and obviously if you like salmon, it’s a good place. So but yeah, well

Drew Hendricks (10:48)

And also

it’s not really western Washington, but if you’re in eastern Washington it’s also a desert. So you do have many, many sunny days.

Fred Glick (10:56)

That’s true. Because the ugly weather can’t get over the mountains and hence the sun comes through. Yeah, it’s a little cooler. Yeah. Nice. So there’s an idea if that’s, you know, in your wheelhouse. We just did a reload for a buyer who actually came from Bellevue and moved to San Diego. So there’s the reverse situation where he says, I’d like some sunshine, please. so

Drew Hendricks (11:00)

It’s still snows, but it’s nice. I spend a lot of time with can.

Fred Glick (11:24)

There’s a reverse, but I think there’s still a possibility that if you’re gonna get out of California for some reason, your first choice would probably be Seattle to kind of get the same feel, the same tech ish, you know, thing. but it’s a little more home-based, a little not as not as it’s definitely not as crazy as LA. Thank God. but

Yeah, read the blog article if it interests you.

Drew Hendricks (11:56)

No, it it’s it’s it’s fascinating. I was just skimming through it myself.

Fred Glick (11:59)

Yeah, there you go.

What else do we have to talk about?

Drew Hendricks (12:04)

What about interest rates? What’s been happening? We haven’t talked about that in at least a week.

Fred Glick (12:09)

Okay. Interest rates 100% lately have just been because of oil prices, and God knows what’s gonna happen with that. The boom is gonna come that everybody’s gonna figure out, you know what? Let me trade my gas car in for an electric one and you get a used one for a really good price that are coming off leases from two, three years ago. That is, I mean, the range anxiety, unless you’re driving like crazy.

and you don’t have any time to charge your car, the range anxiety is not a big deal anymore. And there’s so many places to charge. So

Drew Hendricks (12:44)

I agree. I used to be worried about it. Well, we took my wife’s Tesla to Paso Robles a couple of weeks ago. And it’s a four hundred mile drive or three hundred eighty. But it was so easy just to stop in and the way those Teslas charge you get like eighty percent of the way there in f six minutes.

Fred Glick (12:53)

Mm-hmm. Yeah. I’ve charged. I got the adapter for my car so I can go to the Tesla thing. Now there’s some Tesla places where you have to be a member and you pay like twelve bucks a month. So I haven’t gotten that far. Yeah. Yeah.

Drew Hendricks (13:14)

Is that it? I have to ask her about that. But I I found

It’s nice. If you find one next to a place, it’s almost almost just a little bit longer than pumping. And I saw that the chargers in China right now will charge faster than a gas pump.

Fred Glick (13:28)

BYD is insane. Yeah.

And we’re trying to get to that technology. You know, it’s just gonna get better. I mean, where I’m at, I have this thing called charge it or something. It’s a trickle charger. It takes like five hours to get 75 miles. I mean, it’s ridiculous. It’s you know, it’s but if you have it at a house, the trickle charger, you know, you just charge it overnight, you’re done. Or you can put in the heavy duty two forty line or you know, one of the

Drew Hendricks (13:46)

Mm-hmm.

Fred Glick (13:57)

Crazy Tesla chargers if you have it.

Drew Hendricks (13:59)

Yeah.

We just use the trickle charge and we didn’t drive the Tesla over the weekend and you know, even though you’re getting a micro amount it adds up and w ch Brooks car was at like seventy percent this morning.

Fred Glick (14:10)

Yeah.

Mm in nothing. Exactly. So people are gonna hear from different friends and neighbors and relatives talking about it now. It’s becoming a conversation ’cause I had rented a car yesterday in San Francisco and I filled up a Mazda little SUV thing. Half a tank was like sixty five dollars.

It’s insane. I mean the place near the airport was like seven something a gallon. I didn’t really think about it and it’s just I gotta get gas and there it is. It’s the only and that was at the cheap place, like what was it called? Valor or something like that? Valero, yeah, Valero. And it wasn’t Exxon or Chevron. And so

Drew Hendricks (14:54)

Valero.

No, I can testify that the round trip from to Paso was, you know, about seven hundred miles, eight hundred seven hundred and eighty. And I think the total we spent on energy, I guess, electricity, was about sixty eight dollars, which would be a third of the price if I drove my Jeep up there.

Fred Glick (15:17)

Yeah. So the Tesla’s it’s a little expensive, but you know, you’re getting top of the

Drew Hendricks (15:21)

I didn’t think that was expensive at all. Like you charge your car for sixteen in like fifteen minutes and it’s like twelve dollars. And then and then you can get another three hundred miles. Twelve I mean, twelve dollars for three hundred miles is pretty inexpensive.

Fred Glick (15:28)

Okay. You’re adding cumulative. Yeah. Yeah.

It’s all getting cheaper. And the other thing that’s going on, two things actually I wanted to talk about. One has to do with toilets in San Francisco. Hang on as I pull up the information.

Drew Hendricks (15:51)

I’m always anxious to learn about new toilet technology.

Fred Glick (15:55)

Well, it’s even better than that. Let’s let me get to it. San Francisco, what they’re doing is, and I’ll read it verbatim, save water and money by increasing your water efficiency. All SFPUC customers with qualifying toilets. Do you have a qualifying toilet? Can receive a rebate of up to $200 per toilet to replace toilets with new ultra-high efficiency toilet tanks. So

We can Drew, you can share the link, but it talks about you know getting into those low flow things and getting paid for it. So that’s really nice. And you can do up to five toilets and you can apply online for the rebate. So there you go. That’s a nice thing with toilets. What was the other thing? I can’t remember.

Anyway, I will remember for the next week. Toilet rebate, yes. Isn’t that fun? There you go. That’s for San Francisco only. Yeah, not gonna help you. Anyway, I think that’s enough.

Drew Hendricks (16:58)

Toilet rebate.

I’ll look into that.

No, well, that’s not gonna help

I think so. So check out the post. This if you’re interested, it’s a pretty detailed comparison, like all the way down to the days of sunshine. Yeah. And if you’re in the market for a home, I mean better maybe get off the fence and start buying something before all the AI money comes.

Fred Glick (17:22)

Yeah.

Exactly. I know it’s gonna be in San Francisco, but I’m sure it’s gonna flood down the peninsula. it goes everywhere, yeah.

Drew Hendricks (17:38)

It goes everywhere. I mean it’s gonna it’s San Francisco,

but it’s also gonna give be vacation homes. Like the fellow I know at works in NVIDIA, he’s just finished building his huge vacation home in the ski resort ’cause he has NVIDIA money. But now there’s gonna be AI money. So even in the those smaller areas, it’s gonna it’s gonna impact all of real estate.

Fred Glick (17:43)

Hmm.

Yeah. If you wanna buy that place in Costa Rica, buy it now.

Drew Hendricks (18:06)

He also built a place up in Tamarindo. So he was already right in the thick of it. So yeah, that’s also gonna happen. Which hopefully will trickle down into construction firms and everything there. They’ll have more money. So they’ll be able to buy more homes.

Fred Glick (18:09)

There you go. Perfect.

Right.

And then hopefully we get more of this cement built three D houses to get things you know, all that stuff. That’ll

Drew Hendricks (18:28)

It’s almost prime time now. I would

Fred Glick (18:34)

Yeah. Pretty much, ’cause Lenar’s involved in it and Wells Fargo is now giving mortgages on these type of houses. Not that Fannie Mae isn’t, but Wells is getting involved with some builder. So yeah, it’s mainstream. But you know, you still want to buy a Toll brother’s house, it’s still sticks and bricks. So I don’t really understand why.

Drew Hendricks (18:53)

Mm-hmm.

Fred Glick (18:57)

‘Cause especially in California. ‘Cause then we get into the insurance issues. These three D printed cement houses are gonna be a lot cheaper to insure. So one last thing we’ll leave you with. If you’re looking at a house before you put an offer in in California, make sure you can get insurance and find out what it’s gonna cost. Because the insurance agents can type in the address and let you know everything. If there are a lot of prior

Drew Hendricks (19:06)

Mm-hmm.

Fred Glick (19:26)

things that were wrong that they paid out a lot of money on, you might have a hard time getting insurance because of the house. So and then I talked last week about the insurance company that wanted your disclosure, I mean your inspections and wanted you to do everything on the inspection or they wouldn’t give you insurance. So it’s crazy out there. So it’s enough rambling.

Drew Hendricks (19:49)

Definitely check.

Well, this has been the latest episode of We Fixed Real Estate. Tune in next week to find out something new.