SpaceX millionaires are preparing to spend on luxury homes, watches and travel

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for the high-net-worth investor and consumer. subscription To receive future issues, directly to your inbox.

SpaceX’s IPO has created thousands of new millionaires and many new billionaires. While current and former employees won’t be able to sell their shares right away, some are already planning how to spend their windfall.

This newfound wealth could have a ripple effect across nearby luxury real estate markets SpaceX Office centers and increased spending on hours, chartering private jets and other status symbols, experts told CNBC.

Real estate agent Gerard Bisignano said he recently received inquiries from several longtime SpaceX employees looking for homes in California’s South Bay area. He said their ages ranged from their mid-thirties to early forties.

“They seem to be in a state of disbelief that they’re suddenly going to be able, in some examples, to buy a house for their parents,” said Bisignano, a partner at Sotheby’s Vista auction. “They’re going to have all this discretionary income that they can do whatever they want.”

SpaceX’s California office is located just a short drive from the affluent coastal communities of Manhattan Beach, Redondo Beach, Hermosa Beach and Palos Verdes Estates. Bisignano said he expects many SpaceX employees will buy upscale homes in the area. He noted a similar buying spree in the neighborhoods surrounding Facebook’s headquarters after that company’s initial public offering in 2012, as home values ​​there jumped 21%.

Bisignano said he also expects an influx of interest in second homes in other scenic areas of California such as Mammoth Lakes, Palm Springs and Tahoe.

Texas real estate agent Gary Dolch said he’s seeing similar interest from SpaceX employees in the greater Austin area, where SpaceX’s Bastrop campus is located about 30 miles from downtown Austin. Some plan to buy soon after taking out a margin loan, while others are waiting for the IPO lockup period to expire, he said.

Potential homebuyers’ tastes range from luxury condos on Lake Austin or Lake Travis to 1,000-acre ranches far from the city, Dolch said. He added that he is optimistic that the IPO will boost Austin’s luxury market, which has declined over the past three to four years.

“We appear to be on the cusp of the next wave in Austin expansion fueled by this technology play,” he said.

Bisignano said the new rich rarely stop their spending on their dream home. Buyers are expected to compete for homes with four-car garages to fit their new Ferraris.

Although sports cars are a popular choice, luxury watches are a more practical symbol of everyday use.

A watch is often the first luxury purchase after a major liquidity event, said Paul Altieri, founder and CEO of Bob’s Watches. He said customers usually choose Rolex watches because they are instantly recognizable. He added that models such as the Daytona, GMT-Master II and Submariner are the most popular.

“The watch becomes a reminder of this accomplishment every time they wear it,” he said. “The stock certificate stays in the brokerage account. The watch goes on your wrist.”

Customers who have waited for years are often willing to pay a premium for pre-owned watches by big brands like Patek Philippe and FP Journe, said John Schmerler, CEO of 1916, a luxury watch and jewelry retailer.

The bragging doesn’t stop there. While some SpaceX employees may already have flown first class, the IPO will enable many more to travel by private jet.

DJ Hanlon, executive vice president of sales at Flexjet, and Colin Jones, founder and CEO of Amalfi Jets, said their private jet companies have seen recent inquiries specifically related to SpaceX’s initial public offering.

Jones said customers are already chartering planes to mark the occasion with a flight.

Jones said the best option to celebrate the liquidity event is Las Vegas, especially for young travelers traveling without children. Miami and Cabo San Lucas, Mexico are also popular destinations.

Posters looking to take the whole family on vacation tend toward Aspen, Colorado, and Yellowstone National Park, Jones said. He added that Disney World is a classic choice for local families with young children who want to avoid the hassle of airport security.

With new wealthy clients, Amalfi Jets’ sales team sometimes receives follow-up calls from wealth managers asking to cancel their clients’ charters or downgrade to smaller planes, Jones said.

“It’s funny sometimes to see clients arguing with their wealth manager, saying, ‘No, it’s my money, I want Gulfstream,'” he said. “There will be a lot of people flying privately for the first time, and I think it will be a really fun spending spree.”