It has been just over a year since Amazon announced its HQ2 plans for Northern Virginia, and the news has helped drive home prices in Arlington County noticeably higher.
But the 25,000 jobs Amazon has said its second headquarters will create will come over the course of the next decade, so isn’t it a little soon to be speculating about what HQ2 will ultimately mean to the surrounding housing market?
Not really, according to real estate data analytics firm CoreLogic.
“Amazon is actively hiring. There are Amazon employees on the ground in Crystal City,” CoreLogic Deputy Chief Economist Ralph McLaughlin told WTOP.
“So I think this isn’t just investment and speculation. I think there is substantial demand that is emerging, but that is only going to grow over the next one, two, three to five years.”
Individuals, and families, don’t always relocate to a new city for a job and immediately buy a house or a condo. Even if the intention is to buy eventually, many often rent while they get a feel for the market and find what they want.
But McLaughlin said HQ2 employees might be more inclined to buy immediately, or very soon after making the move to the D.C. area.
“A lot of these jobs are well-paid positions. They are six-figure jobs. Employees in those positions tend to want to own rather than rent,” he said.
“We may see an initial impact on the rental market, but I think the long-term demand is going to be owner-occupancy for these employees.”
The median price of what sold in Arlington County in October was up 4% from a year ago. Prices in Alexandria are up almost 12%, according to Long & Foster Real Estate.
In a recent CoreLogic report on the HQ2 housing market effect, its researchers note individual ZIP codes, especially those near the HQ2 location, have had a strong uptick in price gains since Amazon’s announcement.
And it notes that the relationship between proximity to the HQ2 site and home prices gains have strengthened remarkably since March 2019.
Of the top 10 D.C.-area ZIP codes with the largest increase in year-over-year growth rates, half are within 5 miles of the HQ2 site and eight are within 10 miles.