The US real estate market is struggling when the technology industry is in crisis. Many tech rich people try to sell their homes before prices plummet.
The rich in the technology world are a group of "fat" customers of real estate businesses in the US. However, the downturn in the technology industry is directly affecting the housing business, according to Vice.
After a decade of explosive growth, the technology industry is facing instability for the first time. Valuations are falling, layoffs are up, startup funding is no longer plentiful, and fear pervades the industry.
Both tech bosses and workers must adapt to harsher times.
The crisis of the technology industry spread and affected the real estate market. In cities like San Francisco, New York and Miami, many real estate agents are beginning to feel the impact of the technology downturn on their business.
Crisis spreads
When customers who are rich in technology, grappling with reality, invitations to cooperate, buy and sell real estate are no longer easy.
Karley Chynces, a real estate agent at Sotheby's International Realty in Miami, likens the recession reality to "the elephant in the room" - implying things that are obvious, everyone sees but pretends not to see to avoid responsibility. duty.
Across the United States, soaring home loan interest rates combined with record-breaking home-buying costs have dented potential buyers. There are signs that the housing market may have peaked.
Prices have fallen slightly, construction companies are working on fewer projects and mortgage demand is at its lowest since 2000. A spokesman for real estate brokerage RedFin, which specializes in data analysis on housing, said markets like San Francisco are "certainly cooling down".
A recent analysis by RedFin found that luxury home sales fell nearly 18% in the three months to May, compared with a 5.4% drop for non-luxury homes. (RedFin defines "luxury" homes as those in the top 5% of prices in a given area.)
McKenzie Ryan, a Manhattan real estate agent, many of his New York clients working in technology also invest in Web3. The change in the market caused them to lose their wealth.
Joanna Rose, an agent in San Francisco who primarily works with sellers, said while interest rates are a big deal for homebuyers nationwide, the biggest thing affecting the market here is the decline in stock prices of technology companies.
Most homes worth more than $4 million are bought with cash, she said, and tech workers often liquidate company stock to raise money for homes.
Talking about potential recessions only adds to the fear, Rose has only recently felt its effects on her business. "Everything was quite sudden," she said.
Rose just got a phone call asking about her new $ 3.5 million apartment in a luxury penthouse she listed two weeks ago. She had to talk more with her customers to make them understand the new reality and the recently reduced asking price.
"This is not something that happens often in San Francisco. The situation is reversed," Rose said.
Hurry to sell the house
In Miami, home to a host of tech and crypto companies, the real estate market is heating up, Chynces said. However, the reality is that people are trying to sell their homes before things get worse.
The female real estate agent, who regularly works with "crypto whales," said she received $100 million listings in the past two months as wealthy clients tried to sell off properties before " price plunges into the abyss".
Danny Hertzberg, another luxury real estate agent in Miami, says things have changed.
Hertzberg, who claims to hold the record for the highest home sales in the city's history, said the housing market has slowed, not only in the US but around the world, according to his conversations with agents in various cities. countries including France, Italy, Great Britain and Argentina.
A few years ago, real estate trading was in full swing as the cryptocurrency market flourished and the tech world flourished.
"People buy homes with emotion. If they like it, they pay any price to get it, because they're making money passively and easily. Appraisals aren't so important. There are no contingencies. People will pay a premium to get what they want," Hertzberg recalls.
Falling valuations of tech companies have had a significant psychological impact on the higher end of the market as people try to adjust to less secure realities.
"We see less bidding wars. And sellers are a bit more flexible," said Hertzberg.