Amazon’s HQ2 is already making Virginia county’s housing prices skyrocket
The flood of prosperity Amazon’s HQ2 was supposed to bring to Arlington, Va., is already causing housing prices to spike and inventory to contract, according to new research from local real estate analysts.
When the controversial HQ2 decision was announced, critics warned of the havoc it could wreak on the local housing market. Since Amazon’s arrival, Seattle has become one of the most expensive places to live in the United States, forcing lower-income residents to move to far-off suburbs. Now, the same price spikes are showing up in Arlington.
Median home prices in Arlington County are projected to increase 17.2% by the end of 2019, according to research from the Northern Virginia Association of Realtors and George Mason University’s Center for Regional Analysis. Prior to the HQ2 announcement, the groups had forecast an increase of only 5.2%.
“This is a market response to the Amazon HQ2 announcement with investors competing with residents for a shrinking number of homes for sale,” Terry Clower, CRA director, said at a local real estate conference last week. “The price gains we foresee … reflect the specific circumstances of our current market.”
Housing inventory in Arlington “has fallen off a cliff,” Clower said, and is expected to be down nearly 19% by the end of the year. The groups’ original forecast only called for a 7% drop.
For the past two months, the number of homes sold in NVAR’s coverage area – which includes Arlington County, Fairfax County, Fairfax, Falls Church, Alexandria and Vienna – have held at a 14-year high. The average home lasted just 27 days on the market, down 42 percent from a year ago.
“Speculation on higher pricing once Amazon settles in the region has caused many sellers not to sell their homes now,” Ritu Desai, a broker with Samson Properties and one of NVAR’s board members said in a press release. “While the number of potential buyers entering the housing market in the Northern Virginia region is rising, the ripple impact of low inventory and high demand has caused a tough market for them.”
Those who might have been looking to sell homes may now be looking to hold onto their properties in hopes of renting instead, Clower said at the conference.
“I’m really concerned about the number of ownership to rental conversions we may have going forward, particularly as valuations get higher,” Clower said.
The HQ2 project is now ahead of schedule, executives told The Washington Post, primarily because state and county officials had acted quickly to approve multimillion-dollar incentives packages. The company has leased temporary space in Crystal City and will start operations in June instead of October, as originally planned.