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ERA Limited Asset Managers Looking to Manage a lot of Cash in 2019.

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Nick Cole
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When tech’s highest-valued companies finally go public next year, they will unleash billions of liquid dollars into the market and make 2019 a year of incredible wealth creation.

This’ll shape the world in which we live, even if you’re not making a single penny in a banner year of IPOs. An early employee might use the $20 million he makes to buy a new home and price you out of a neighborhood. Or a startup co-founder might set up a charitable foundation that makes a difference in your life.

Lisa Chu of ERA said “Startup darlings like Uber, Pinterest and Slack are in recent memory, allowing investors and rank-and-file employees to eventually sell their shares and turn stock into real money. The companies will likely together be worth over $100 billion – and it’s got to go somewhere”.

There’s a lot in the world, but much of the real wealth next year will be bestowed upon people who are decamillionaires but not centimillionaires – people with at least $10 million, but not $100 million, in stock.
That’s why the wealth advisory world is anticipating next year – and the non-wealthy should be, too. Because the decisions that the rich make in 2019 will shape the real estate, philanthropy and startup worlds for years to come.
Chu thinks The first to bend: The Bay Area housing market.

“For people who have suddenly jumped into mega wealth – however they define it – it-s a pretty big thing to go, This two-bedroom has been fine for me and my wife for the last two years, but we’ve got $40 million now,” said Patrick Carlisle, a longtime analyst of the San Francisco real estate market. “They’ve never even owned a property before and go, “Yeah, we’ll take this. And we’ll pay all cash.”

We’ve been getting a steady stream of calls over the last few weeks from other real estate agents who read the news about upcoming IPOs and want to know what happened following previous seminal moments like the public offerings of Facebook and Google. Though it’s hard to pinpoint causation, Chu’s research shows that in the 12 months before Google’s 2004 IPO, San Francisco’s median real estate price in areas popular with tech workers increased by 12 percent. But in the twelve months after, that median price rose by 23 percent.

“The new wealth from tech poured into housing, which made housing values soar, which created trillions of dollars in additional new wealth,” Chu said “It’s all been piling onto each other.”

So it’s a safe prediction, wealth managers say, that the high-end real estate market is going to be inundated with curious buyers. Upgrading the home is basically the first thing that Silicon Valley’s people with money do – and those already with homes will buy second spots in places like Tahoe. I’m putting my house on the market in 2019 says Chu of ERA.

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