Last fall, Amazon changed Virginia forever when it announced its decision to locate a much-hyped HQ2 office facility in the state’s Arlington County.
And now, exactly one year later to the day, the impacts of that announcement on the area’s real estate have come into focus: There are inventory shortages, skyrocketing prices and “a blistering pace of sales.”
That’s the verdict of a new report, released Wednesday, from realtor.com. The report ultimately concludes that Amazon’s announcement had an “immediate effect” on the area’s housing market, and that “the aftermath has been felt throughout the area since then.”
Of course, as with any change in the market, there are winners and losers. In this case, the winners are people who already own real estate in the area; the report found the median listing price in Arlington County hit $863,000 in October, a leap of 32.9 percent year-over-year. Moreover, half of all homes in the area are selling in less than 28 days, which realtor.com found is 9 days faster than during the same period in 2018.
Price growth has been strongest near HQ2, in the Crystal City neighborhood, with realtor.com stating that buyers are “eager” to live near the retail giant’s office.
Realtor.com found that prices grew the most near HQ2. Credit: realtor.com
However, the impacts of Amazon’s announcement aren’t confined to Crystal City alone.
“Our data shows that the announcement set off a surge of home sales rippling out from the site of HQ2 to over 50 miles away,” realtor.com reported.
That surge happened gradually, beginning in the immediate vicinity of HQ2 in December 2018 and extending out 50 miles from the office by March 2019.
While all of this is likely welcome news for anyone considering selling a home in the area, it’s less positive for people looking to buy. According to the report, active listings last month were down 49 percent year-over-year, representing “a massive shortage of available inventory compared to the time just before the announcement.”
And that “massive shortage” extends way out.
“Without inventory available to meet current demand, buyers are extending their home search farther out,” realtor.com found. “In Northern Virginia, which is made up of 14 counties, active listings are down 26 percent year-over-year. The median listing price in Northern Virginia reached $533,000, up 8.2 percent year over year.”
One place that has likely avoided such a swing in its market, however, is Long Island City in Queens, New York. Amazon originally wanted to build HQ2 offices there as well as in Virginia, but abandoned the plans amid intense pushback from some lawmakers and locals. Though agents have characterized Long Island City as an up-and-coming area that will survive either way, some also described Amazon’s reversal as “devastating.”
For Arlington County, on the other hand, there’s every reason to believe that the trend toward higher prices and lower inventory will continue intensifying. According to WTOP, there are already 300 people working at Amazon’s Crystal City office, and that number should climb to 400 by the end of this year.
However, Amazon has stated in the past that it plans to locate 25,000 workers in its HQ2 office, meaning demand for housing could still skyrocket well beyond current levels.
Realtor.com’s findings also confirm previous reports that prices had jumped and inventory was falling in the area surrounding HQ2. A report from August additionally indicated that locals, rather than Amazon workers, were primarily responsible for snatching up the area’s real estate.
Lawmakers are also working hard to facilitate the retail giant’s arrival in Virginia, with WTOP reporting that Arlington County earlier this year approved $23 million in growth incentives for the company.
If nothing else, though, all of this activity is keeping area real estate agents busy. Among them, Jordan Stuart — an agent with Keller Williams Capital — told Mansion Global that in May of this year he sold an apartment unit that he had previously represented four years ago. The first time around he had trouble selling the property, but when it hit the market again in 2019 it received multiple offers and ultimately closed for more than $100,000 over the asking price.
Stuart painted a picture of massive demand in the region. “What that means is you’re listing the home on a Thursday, holding an open house on Saturday, reviewing a contract on Monday and in contract by Tuesday,” he told Mansion Global.
For better or worse, realtor.com suggested in its report that those type of conditions are likely to persist.
“Massive inventory shortages, sky-high price spikes and a blistering pace of sales are now the norm in the metro surrounding Amazon’s second headquarters,” the report found, “propelling it to one of the nation’s hottest housing markets.”