It was five years ago this month that Amazon officially announced Arlington, Virginia, as it’s selection of its HQ2 campus. In addition to elation about the big economic win, there was also hand-wringing about Amazon’s impact on local housing affordability.
“Amazon was bringing 25,000 highly-paid employees to a market where housing was already expensive. There were a lot of fears those new workers would push residents out or make it really hard to find affordable housing to buy or rent,” said Lisa Sturtevant, chief economist at listing service Bright MLS.
Initially, it looked like those well-paid incoming employees were having an impact on prices and demand, but it didn’t raise red flags and it didn’t last.
“Short-term, there was a bump up in single-family prices in the National Landing area and Arlington more generally. It was pretty short-lived, and it seemed to be driven more by the announcement itself rather than new workers moving in,” Sturtevant said.
To date, Amazon has staffed up HQ2 with about 8,000 employees, enough of an influx that it should have registered on the housing market radar screen on sales, prices and rent. It may have, but it is unclear. The waters became muddy.
“Just 18 months after the HQ2 announcement, we were hit with COVID,” Sturtevant said. “COVID really, of course as we know, changed everything, including the housing market.”
A chain of pandemic events led to what remains to this day the D.C. area’s biggest challenges; tight supply and rising prices. Price gains have slowed this year, but sales and rising prices were on a tear during the first two years of the pandemic.
Further complicating the HQ2 calculation on the D.C. area’s housing market is uncertainty about Amazon’s expanded workforce ahead. Amazon has announced an indefinite hold on Phase 2 of its HQ2 campus. A pullback in new Amazon hires lessens Amazon’s impact, but it will not dampen the housing market, which remains driven by strong demand and constrained supply of homes for sale.
The full report on HQ2’s impact on the local housing market by Bright MLS is online.
