Author: NY Post

Translation: Deep Tide TechFlow

Deep Tide Reading: SpaceX is on the verge of setting the record for the largest IPO in Wall Street history, valued at $1.8 trillion. It is estimated that up to 4,000 SpaceX employees, from engineers to cafeteria staff holding stock options, will overnight become millionaires. In Brownsville, Texas, located near SpaceX headquarters, the median home price is only $290,000, and local real estate agents have begun preparing for this wealth wave.

SpaceX will be listed on NASDAQ under the code SPCX on Friday, marking the largest IPO in Wall Street history, with a target stock price of $135, approaching a valuation of $1.8 trillion.

It is estimated that this IPO will create 4,000 new millionaires among SpaceX employees, benefitting everyone who holds employee stock options as part of their compensation, from engineers to cafeteria workers.

In Brownsville, the Texas town near SpaceX headquarters, real estate agents are getting ready for this gold rush. The median listing price for homes in Brownsville is only $290,000, down 7.9% year-over-year, well below the national median of $425,000.

In April of this year, there were 1,617 active listings in Brownsville, of which only 67 were priced over $1 million.

Luxury Housing Market Seriously Limited

"By national standards, Brownsville's luxury housing market is not large," said Realtor.com senior economist Hannah Jones. "Only 4.1% of homes for sale are priced over $1 million, with the 95th percentile just below $925,000, far lower than comparable thresholds in Austin or Houston."

However, Jones noted that the broader Brownsville market is diverging.

"Long-term residents are facing real housing affordability pressures—while new professionals, many of whom are SpaceX relocators, find Brownsville to be very affordable compared to where they came from," she explained.

Jones referred to the upcoming SpaceX IPO as "the biggest unknown."

"Because SpaceX has always compensated employees with equity rather than cash, much of this wealth is illiquid," she said.

Now, with the IPO potentially creating so many new millionaires, Jones believes a significant portion of this capital is likely to flow into real estate.

"Given the tight supply of luxury homes, even modest demand from newly liquid employees could quickly push prices up in the high-end market," she said.

How SpaceX Came to Brownsville

In 2014, SpaceX chose Boca Chica Beach, located about 25 miles east of Brownsville, as the site for its commercial launch facility, Starbase.

In March 2021, Elon Musk tweeted, "Consider moving to Starbase or the Greater Brownsville/South Padre Island area, and encourage friends to do so! SpaceX's hiring needs for engineers, technicians, construction workers, and various essential support staff are growing rapidly."

Brownsville real estate agent Bob Torres told Realtor.com, "That was the first time I suddenly started receiving calls from everywhere. Oregon, Washington, Maine, Northern California—everywhere."

He said the ensuing real estate boom was something he had never experienced before.

"It’s definitely a boom," Torres recalled. "A lot of the buyers are SpaceX employees—you would see colleagues bidding on the same property, and all houses sold above the asking price."

Torres sold many properties to out-of-state buyers who had never seen the homes.

"I have clients from Portland who have never been to Texas before," he said. "We just did a FaceTime call, and they made an all-cash offer. They didn’t even have jobs at SpaceX yet but hoped to get one — and eventually, they did."

Torres said that in 2024, when Musk moves the SpaceX headquarters from Hawthorne, California, to Starbase in Boca Chica, Brownsville's attention will increase—it’s only 25 miles from Brownsville.

By 2025, Texas Starbase officially became a registered city.

"Five or six years ago, land you couldn’t give away is now skyrocketing in price," Torres said. "They’ve built many zoning development projects there."

The market impact is immeasurable.

"SpaceX has had a significant impact on our market and buyer confidence in the region," Brownsville real estate agent Trisha Scott told Realtor.com. "While we can never attribute housing trends entirely to one company, SpaceX has created jobs, attracted talent, raised national visibility, brought in tourism, and encouraged additional investment throughout the region. These factors generally support housing demand and economic growth."

Expected Impact of the IPO

As the SpaceX IPO approaches, Bloomberg reports that over 1,000 current and former SpaceX employees have banded together to negotiate with wealth management firms for better pricing and tax-advantaged product opportunities.

Meanwhile, Brownsville real estate agents are closely monitoring and anticipating an increase in demand for scarce luxury property in the region.

"The new millionaires in our area will absolutely have an impact," Scott said. "If a large number of SpaceX employees acquire significant wealth through the IPO, we may see an increase in demand for high-end homes, investment properties, and vacation homes in the area. However, I believe any impact on the local market may manifest over time rather than overnight."

Torres agrees.

"I don’t think SpaceX employees will immediately experience a boom after getting their money, saying 'I want to buy this, that, or the other,'" he said. "I think they will need time to digest this, but eventually, they will start buying."

Growing Pains

Despite SpaceX's presence being welcomed by many in the community, some have expressed concerns about its impact.

"There are old-school folks who prefer a slow pace, low rents, and low property taxes," Torres said. "They are not too fond of all this change—like when the beach closes for launches."

But according to Torres, Musk still has many supporters in the area—especially because he has donated millions to schools in Brownsville and downtown revitalization efforts.

Additionally, he has brought Brownsville into the national spotlight.

Scott said, "SpaceX has undoubtedly brought Brownsville, South Padre Island, and the entire region into the view of people who may not have considered relocating to the area before."