To echo Jeff Bezos—it’s Day 1 for the D.C. metro region and for the newly dubbed “National Landing” neighborhoods, including pieces of Crystal City, Pentagon City, and Potomac Yards in Arlington County, Virginia, which today was named by Amazon as one of its two HQ2 locations.
What does it mean for the real estate market? Here are the HQ2 opportunities (and challenges) for the DC :
Moderate home price appreciation expected. Seattle has seen an almost 73 percent increase in home values in the past five years, compared to the 15.5 percent that’s been reported in Arlington County. We expect rises in median home prices will occur with Amazon’s move, albeit at a more moderate pace than what’s occurred in Seattle. While price appreciation benefits existing homeowners, it could exacerbate the affordability challenges facing first-time buyers and renters in our region. Likewise, demand for housing will push higher with the addition of 25,000+ high-paying jobs, and that could stress our already-challenged low-inventory environment in some neighborhoods.
Added jobs will drive wage growth. As mentioned, Amazon is set to bring over 25,000 jobs (over the next twelve years), with an average wage of more than $150,000. The Washington metro area already has a healthy job market with low unemployment, and the added Amazon opportunities will further benefit our local economy. Skilled workers are likely to enjoy a spike in wages, with area businesses now facing increased competition for their talent.
Where Amazon leads, others will follow. Amazon’s decision to call Arlington County home may spark other companies’ interest in the D.C. region. Ancillary businesses will follow in support of Amazon’s operations, and we’ll see billions of dollars invested into our economy from our local and state governments, as well as business.
Increased density will affect our infrastructure. Traffic around the D.C. metro already ranks among the country’s worst, and the addition of 25K+ jobs in the D.C. close-in suburbs will add to commute challenges for both drivers and Metro riders. The Commonwealth of Virginia and Arlington County have committed to investing in infrastructure improvements, but those upgrades will take time.
Spillover in Washington, D.C., but where? We might see some spillover in the housing market in Washington, D.C., particularly in those areas near the George Washington Parkway and the Francis Scott Key Bridge, such as Georgetown and Burleith; other areas accessible to Crystal City by the blue/yellow Metro lines, such as Columbia Heights or Shaw, may benefit as well. Also, young professionals might prefer the South West Waterfront or Navy Yard to living in Crystal City.
Sources:
https://www.longandfoster.com/pages/national-landing
Shot in the arm: Northern VA lands half of Amazon’s massive HQ2 deal: https://wtop.com/local/2018/11/reports-amazon-selects-northern-virginia-and-new-york-as-hq2-sites/slide/1/
Amazon Blog- https://blog.aboutamazon.com/company-news/amazon-selects-new-york-city-and-northern-virginia-for-new-headquarters
What Amazon’s HQ2 will mean for house prices: https://www.marketwatch.com/story/what-amazons-hq2-means-for-homeowners-home-buyers-and-renters-in-the-chosen-city-2017-10-20
