Amazon’s decision to open a second headquarters in northern Virginia is causing a major housing boom — but not among the people you’d suspect.
As first reported by the Washington Post, local residents, along with investors, not Amazon employees, are snapping up properties near Crystal City, the neighborhood in Arlington, Virginia, that will be home to the tech company’s HQ2.
According to Redfin’s estimates, the November announcement turned the surrounding Alexandria and Arlington areas into two of the most competitive markets in the country, with houses selling more than 20 days faster than in the rest of the country.
“I had a condo listing right across from ‘ground zero’ of HQ2 last fall and it had been on the market for 90 days with no interest at all. [The owner] was about to take the listing off the market,” Mara Gemond, a Redfin agent from Northern Virginia told the Post. After the news of Amazon’s headquarters choice leaked in November, it sold for $70,000 more than the original ask.
Though homes in Arlington and Alexandria are selling at an average of 30 days faster than they did a year ago, the interest is coming from locals hoping to score a deal before the Amazon employees come in. According to the Post, Amazon plans to hire 400 new employees in 2019 and between 1,000 and 1,500 in the coming years. Amazon employees have an average salary of $150,000 — a number that leads locals to believe that they will start buying houses soon after arrival.
Housing inventory in Arlington and Alexandria is at the lowest it’s been since 2006. Investors hoping to get in on the Amazon boon are making all-cash offers that ward off regular homebuyers while people who already live in the area are putting off plans to sell. As a result, any home that is placed on the market is quickly snapped up. According to Redfin, 57 percent of all homes for sale in the two cities went off the market in less than two weeks.
“These [buyers] are speculators or folks who just want to live in Arlington and Alexandria,” Northern Virginia Association of Realtors President Christine Richardson told the Post. “The Amazon announcement put them in a tailspin. They are probably renting and intended to buy in 2021 or so, but they said, ‘I’ve got to accelerate this.’ Then you have the opposite [instinct] with the sellers.”
But despite a lot of local agitation, it is still too early to tell how the “Amazon Effect” will impact the market. Just how much will rent prices rise? Will there be the same home value spike that Seattle saw throughout the 2000s? At the moment, it is the locals, homeowners and investors alike, who are hoping and waiting for the house-hungry Amazon workers to come later.