Degen Pener previously wrote about rats at some of L.A.’s hottest restaurants and why more people in Hollywood are smoking cigarettes.
When the Palisades Fire destroyed much of the Westside community last year, many displaced residents headed south for temporary housing in Los Angeles County’s South Bay. “We had over 300 families join our various schools,” says Hermosa Beach-based Compass real estate agent Lauren Forbes.
Now, according to Forbes, many of those folks are thinking of putting down roots in the area, which is known for its family-friendly neighborhoods and laid-back, coastal vibe. “A lot of them had temporary housing for a period of time and then they did a year’s lease,” she says. Then in the past few months, many of those year-long leases ended. “A lot of them, especially the people with younger [kids] who thought they were gonna go back [to Pacific Palisades], have decided to stay, in part because they love our community, in part because their kids have assimilated to schools here. There are lots of different reasons why.”
But there’s one factor those families hadn’t counted on dealing with as they look to buy houses in their newfound communities: a predicted run-up in prices and possible bidding wars brought on by the most gargantuan IPO of all time. When SpaceX went public on June 12, it didn’t only make founder Elon Musk the world’s first trillionaire and raise nearly $86 billion for the aerospace and AI company — it also turned more than 4,000 current and former employees into new “rocket money” millionaires. Around 400 of those are likely to earn $100 million or more, according to an analysis by San Francisco-based investment platform Hill.com. And early investors in the company — such as Lakers star Austin Reaves, who recently said that he “got into SpaceX a couple years ago” — have also seen their stakes in SpaceX turn into staggering windfalls, despite the beating the stock price has taken in recent weeks.
“I believe it’s gonna have a huge effect on the real estate market,” says L.A.-based mortgage broker Chris Furie, the co-founder of Insignia Mortgage. “I think it’s really good for Southern California real estate.”
The Hawthorne Effect
Much of that impact will be south of the 105 freeway. The majority of SpaceX employees still work at its facility in the South Bay city of Hawthorne, where the company was based until it moved its headquarters to Texas in 2024. One former SpaceX employee (speaking anonymously, due to an NDA) tells The Ankler that even before the IPO, “the general consensus [among workers] was that if the company were to go public, then it was definitely going to be house-buying money.”
Agents expect that Westside prices will see a significant bump as well, from Playa Vista and Venice to Santa Monica, Malibu and Brentwood. Some transactions are already taking place. And the biggest impact may not be confined to the trophy-home market: Agents have identified one far more accessible price range where the competition could become especially intense.
For this story, I interviewed eight L.A.-area real estate professionals about the SpaceX effect. Most foresee that prices will rise in the highly sought-after South Bay cities of Manhattan Beach, Hermosa Beach and Redondo Beach, as well as on the Palos Verdes peninsula. Some agents have already done deals for SpaceX employees and early investors who are trading up or buying their first home. They’ve also represented sellers who sold their homes to equity-rich SpaceX buyers. “The SpaceX IPO is so unique because it’s literally in our own backyard,” says Nicole Plaxen, an agent with Sotheby’s International Realty in Beverly Hills.
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