HOW HQ2 WILL AFFECT LOCAL REAL ESTATE MARKETS: HYPE OR HELP?
Much has been written and said about the potential impact of Amazon’s decision to locate half of their “HQ2” Corporate Expansion to Northern Virginia. Since the announcement, many in our industry (as well as chief regional economists) have been weighing in on the potential impact for our local housing market.
How Many Jobs Did You Say?
The much touted 25,000+ jobs that Amazon will fulfill in their new Crystal City (“National Landing”) headquarters may be less than anticipated. Certainly, these jobs will be phased in over time - - 20 years by some predictions - - and therefore will be spread out over a substantial period of time, diluting the impact in the near term
New Jobs Or New People?
The approximate 1,000 jobs per year increase are not necessarily going to be new workers brought in from outside of our marketplace. In fact, one of the attractions for Amazon to our area was the depth of local talented young, educated workers. So, it is entirely possible that they will fill these positions with local talent - - which means fewer actual new families moving into our area looking to buy a home
Where Will They Go?
Economists have predicted that the likely newcomers to our area will be spread out across Northern Virginia, Washington D.C., and Suburban Maryland. This means that the addition of a couple hundred potential Buyers per year into each respective marketplace that typically sees thousands of transactions each year will not move the needle tremendously - - again, not a significant increase
Just Like Our Typical Market
Certainly, specific locations close to National Landing (Arlington and Alexandria) will benefit from their proximity to the new HQ2, however lower prices in the surrounding suburbs will draw families who want more home for their money (the typical Washington D.C. Metro real estate dilemma)
The Bottom Line:
The data and continued analysis supports that while Amazon’s choice of Crystal City will deliver long-term economic growth for the region, the impact on real estate values and markets may be wildly over-rated and yet another case of perception being replaced by reality over time.
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