By Heather Perlberg and Prashant Gopal
It turns out that even the well-off need help in a housing market as crazy as the one in the San Francisco Bay area, and lenders are elbowing each other in a rush to provide it.
They’re courting Silicon Valley workers with tailored loans, guaranteed 24-hour approval and financial-planning services. Social Finance Inc. has deals with Google and other top technology companies that allow it to market to new hires. First Republic Bank -- which gave Facebook Inc. billionaire Mark Zuckerberg a 1.05 percent interest-rate mortgage -- has opened branches in Facebook and Twitter Inc. headquarters. San Francisco Federal Credit Union will finance 100 percent of houses costing up to $2 million.
Michael Tannenbaum, senior vice president of SoFi’s mortgage group, calls it “white-glove service.” Lenders often give special treatment to the wealthy, of course, but the tech industry has created a particularly ripe crop of clients who are rich or on their way. It’s a smart bet to cater to a sector that’s created thousands of millionaires and dozens of billionaires, says Glenn Kelman, chief executive officer of the brokerage Redfin. The downside is that the most expensive U.S. housing region is becoming “a no-fly zone for anyone outside technology,” especially with so many people shut out altogether by tight credit standards imposed after the 2008 real estate crash.
What’s going on “might be good for the borrower and good for the lender,” he says, “but it’s not necessarily good for San Francisco.”
The city’s median home value is $1.13 million, up almost 67 percent since 2011, and the numbers are higher in some nearby towns -- $6.36 million in Atherton, according to Zillow, and $4.12 million in Hillsborough.
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Malinvestment chasing a symptom of malinvestment.
ReplyDeleteI don't know how they can still hire people that don't already live there. These companies don't pay enough to take on that amount of debt and risk just to be an employee. In that situation one is owned by the company he works for. Making a 150K/yr and well over a million dollars in debt when they say work 80hr weeks there's no telling them where to go. Better off making a $100K where the housing isn't so expensive.
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