SpaceX’s listing is expected to create thousands of new millionaires and billionaires. Although current and former employees cannot sell their shares immediately, many people have already planned how to spend this natural wealth. Industry experts told CNBC that the consumption boom of these new wealthy people will have a chain effect: boosting the high-end residential market around SpaceX’s major office bases, while also driving the consumption of luxury watches, private jet rentals, and various status symbol luxury goods.
Panoramic view of coastline near Palos Verdes
Real estate agent Gerald Bisignano said that many SpaceX employees who have been with the company for many years have recently inquired about housing in South Bay, California. These customers are concentrated in their 35s to early 40s.
Bisignano, a partner at Vista Sotheby's Real Estate, said: "They themselves can't believe they got rich overnight, and many of them plan to buy properties directly for their parents. With a large amount of discretionary income, they can finally realize their wishes."
The SpaceX California office is a short drive from wealthy coastal communities such as Manhattan Beach, Redondo Beach, Hermosa Beach, and Palos Verdes Estates. Bisignano predicts that a large number of SpaceX employees will buy high-end homes in the area. He mentioned that after Facebook went public in 2012, communities around its headquarters also experienced a housing buying boom, with overall local housing prices rising by 21%.
He also predicts that the number of inquiries for vacation villas in scenic resorts such as Mammoth Lakes, Palm Springs, and Lake Tahoe in California will also surge.
Texas real estate agent Gary Dolch also said that there is a similar demand for home purchases in the Austin metropolitan area. SpaceX’s Bastorp campus is about 30 miles from downtown Austin. Some employees plan to apply for a margin loan to buy a home immediately, while others choose to wait until the equity lock-up period is over before selling.
According to Dortsch, the demand from homebuyers spans a huge range: from high-end apartments on the shores of Lake Austin and Lake Travis to private ranches covering thousands of acres in the suburbs. Austin's high-end real estate market has continued to cool down over the past three or four years, and he is optimistic that this listing will lead to a rebound in the market.
He said: “Thanks to this wave of technological wealth creation, a new round of real estate expansion in Austin is just around the corner.”
Bisignano said that the consumption of newly wealthy people will never stop at their favorite luxury homes. Many people will buy single-family garages that can park four luxury cars to park their new Ferrari sports cars.
Although sports cars are popular, high-end watches are more everyday, low-key accessories that highlight status.
Paul Altieri, founder and CEO of Bob Watch Company, said that after a large amount of assets is successfully realized, a watch is often people’s first luxury item. Most consumers prefer the highly recognizable Rolex. Daytona, GMT-Master II and Submariner are the three most popular models.
"Every time I raise my hand to look at my watch, I am reminded of my achievement." He said, "The stock certificates are lying in the brokerage account, but the watch can be worn on my hand at all times."
John Schmerler, CEO of high-end watch and jewelry retailer 1916, said that many customers have been waiting for years and are willing to pay more for second-hand watches from top luxury brands such as Patek Philippe and FP Journe.
The consumer boom goes beyond real estate and watches. Some SpaceX employees have only flown first class on civil aviation before. After the listing and cashing out, many people will choose to travel on private jets.
D.J., vice president of sales for private jet company Fletcher. Colin Jones, founder and CEO of Hanlon and Amalfi Private Jets, revealed that a large number of recent consulting orders are clearly related to SpaceX’s listing and cashing out.
Jones said that some customers have chartered private jets in advance and are preparing to travel on special planes to celebrate their wealth.
Jones said that Las Vegas is the first choice for young customers without children to celebrate cashing out; Miami and Cabo San Lucas, Mexico are also very popular.
Customers traveling with their families prefer Aspen, Colorado, and Yellowstone National Park; local families with children often choose Disneyland to avoid the cumbersome process of airport security.
Jones also mentioned an interesting phenomenon: After many newly wealthy people place orders for charter flights, their financial advisors will call to cancel the order or ask for a smaller model.
“It’s common to see clients arguing with financial advisors. The client says, ‘This is my money, and I want a Gulfstream business jet.’” He said, “A large number of people will fly on private jets for the first time in their lives, and this wave of consumption will definitely be very popular.”