July 26, 2026
Why this cycle may look different than Uber, Pinterest, and the tech IPO wave of the 2010s.
Every few years, a new wave of technology companies captures the world’s attention – and along with it comes a familiar question: What does this mean for Bay Area real estate?
Today, that conversation centers around artificial intelligence. Companies like OpenAI, Anthropic, Thinking Machines Lab, Scale AI, and Databricks have reached staggering valuations, and many industry observers believe a new wave of IPOs could create unprecedented wealth.
The prediction is simple: more millionaires will mean higher home prices.
History, however, suggests it’s not quite that straightforward.
We Heard This Before
If you’ve lived in the Bay Area long enough, this probably sounds familiar.
In the years leading up to the IPOs of companies like Uber, Pinterest, Lyft, Slack, and Airbnb, headlines predicted a flood of newly wealthy buyers who would send Peninsula home prices soaring.
Some of that happened – but not nearly to the degree many expected.
Why?
Because by the time many of those companies went public:
- Employees had already sold shares through private secondary markets.
- Some had already purchased homes years earlier.
- Others were subject to lock-up periods that delayed liquidity.
- In several cases, the IPO valuations didn’t exceed expectations by much.
The IPO itself wasn’t the event that changed the housing market. Much of the wealth had already been created.
Why AI Could Be Different
While there are similarities, today’s AI landscape has several characteristics that could make this cycle unique.
Smaller Teams, Larger Equity Stakes
Unlike Uber, which employed tens of thousands of people at the time of its IPO, many leading AI companies remain surprisingly small.
Instead of spreading equity across tens of thousands of employees, wealth is concentrated among a relatively small number of engineers, researchers, and early hires.
That means fewer buyers – but potentially much wealthier ones.
Rather than entering the market for a $2 million home, many may be competing for properties in the $5–15 million range.
We are seeing this anecdotally this year and the numbers back it up! In Q2 2026, the number of homes selling for more than $4 million in San Mateo and Santa Clara counties increased by 20%, while the average price per square foot rose 7% year over year.
But Much of the Wealth Already Exists
One of the biggest differences between today’s startups and those of two decades ago is that an IPO is no longer the first opportunity for employees to realize wealth.
Private tender offers, secondary markets, and company-sponsored liquidity events allow employees to sell portions of their equity long before a company goes public.
In other words, many future homebuyers may already have the financial resources to purchase today.
From a real estate perspective, some of the demand that people expect after an IPO may already be working its way into the market.
The Real Difference May Be Inventory
The biggest factor isn’t necessarily how many millionaires AI creates.
It’s how few homes are available.
Many Peninsula homeowners have mortgages with interest rates below 3%. Understandably, they’re reluctant to sell and take on today’s borrowing costs.
That has left inventory exceptionally tight in many of the communities we serve, including Los Altos, Palo Alto, Menlo Park, and Los Altos Hills.
In a market with limited inventory, it doesn’t take thousands of additional buyers to influence prices. Even a few hundred highly qualified buyers competing for a small number of homes can create meaningful upward pressure—particularly in the luxury market.
Don’t Forget Nvidia
Interestingly, the biggest real estate story of the past two years may not have been AI startups at all.
It may have been Nvidia.
As Nvidia’s stock appreciated dramatically, thousands of long-time employees suddenly found themselves with significant liquid wealth. Unlike startup employees waiting for an IPO, these shareholders already owned publicly traded stock that could be sold immediately.
Many industry observers believe Nvidia’s success has already had a meaningful impact on the Peninsula housing market—and it’s possible that effect has been larger than what any single future AI IPO will produce.
So… Should Buyers and Sellers Expect a Boom?
Probably – but not because of the IPO headlines.
The real story is that AI is creating extraordinary wealth, much of it before companies ever reach the public markets.
Whether that translates into higher home prices depends on several factors:
- How much equity employees actually hold
- Whether they choose to remain in the Bay Area
- Interest rates
- The pace of new inventory coming to market
- The broader economy
As always, real estate isn’t driven by a single headline. It’s driven by the interaction of supply, demand, financing, and consumer confidence.
For homeowners considering selling, understanding today’s buyer has never been more important. Wealth creation is evolving, buyer motivations are shifting, and the strategies that worked five years ago may not be the ones that create the strongest outcome today.