Amazon had just announced that it had selected its final location for its second Headquarters or HQ2. HQ2 will be in two locations namely Long Island City, New York, and Arlington, Virginia. This is the result of a year-long search which even includes Chicago, Denver, Nashville, Miami, and Indianapolis in its top 20 selection. What will be Amazon HQ2 effects on real estate?
“We are excited to build new headquarters in New York City and Northern Virginia… These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.” – Amazon Founder and CEO Jeff Bezos
Amazon HQ2 Effects on Home Prices
Amazon HQ2 effects on real estate primarily will be on home prices. The addition of an Amazon headquarters in Long Island and Arlington will definitely increase the values of surrounding properties. It is indeed an unprecedented development since it will give not only jobs to the city but an overall economic boom.
“Today’s announcement of HQ2 will likely have a quick impact on home prices and rents in Arlington, Virginia, and New York City. That’s because Amazon’s HQ2 is like nothing we’ve ever seen before. Not only is it one of the largest company headquarters openings, but the amount of attention it’s received is unparalleled. There’s no doubt that investors and landlords in these areas have been following the news trying to get ahead of the Amazon housing boom.” – Danielle Hale, chief economist for Realtor.com
We might see an average spike from 56% to as high as 83% in the succeeding years. This is based on the data from the effects of AMazon’s HQ1 in Seattle.
“Over a longer term, sales prices are up 83% since 2008 for homes located one to five miles from Amazon’s HQ1, compared with a 67% jump for homes within one mile, and a 56% jump for King County.” – Realtor.com
Increase Interest of Home Buyers
Home buyers became excited minutes after the announcement. There were reports of an increase in phone calls and emails to real estate agents requesting to view properties near the Amazon HQ2 area. Online searched of listings and sales are also trending since the announcement.
In fact, it will be best to purchase a home or location near the new site now that later because it might be more expensive in the future. Businesses near the area can expect to enjoy some sort of boost from the increase jobs and influx of people.
Amazon HQ2 Effects on Real Estate and Housing Affordability
“Arlington already has an affordable housing crisis due to gentrification and rising rents, which HQ2 will surely exacerbate. Our schools are already at capacity across the region with no clear solution planned regardless of the impact of HQ2.” – Alex Howe of Metro DC Democratic Socialists of America Northern Virginia Branch
It can be expected that once Amazon HQ2 is fully operational, home prices and rents near the surrounding areas will also increase. This is a double edge effect that could either be positive or negative depending on how the city and the residents react to it. New Yorkers also question the amount of tax incentive being given to Amazon which equates to $48,000 per job created by the tech giant.
What do you think of Amazon HQ2 effects on real estate? Will it be good or bad? Share us your thoughts.