Seattle-based Amazon’s announcement that it would be building a second headquarters in Northern Virginia boosted home prices and sales, albeit temporarily, according to a new report.
The finding is based on an analysis by Bright MLS, a real-estate database company. In “Five Years Later: Amazon’s Impact on the Local Housing Market,” Bright MLS analyzed closed sales and price trends and trends in for-sale listing descriptions in the greater Washington, D.C., region over an 18-month period.
The authors found that after Amazon announced that it was building its secondary headquarters, dubbed HQ2 during an exhaustive and high-stakes search process, in Arlington, Va., in November 2018, home prices rose faster and houses sold faster in Arlington than in neighboring areas.
“The announcement itself did prompt a spike in real-estate values,” Lisa Sturtevant, chief economist at Bright MLS, told MarketWatch. “But it was pretty short-lived.”
The Bright MLS report answers some of the questions that arose when Seattle-based Amazon first selected Arlington for its second corporate campus.
The news immediately stirred predictions that housing prices would shoot up as a result of the tech giant’s presence, especially because Amazon said it would ultimately create 25,000 jobs with an average salary of $150,000.
The report shows that Amazon had an effect on local real estate, but not necessarily a lasting one.
“Amazon HQ2 did have a transitory impact on the housing market and did give home prices a shot in the arm,” the report stated.
Amazon pushed back on the main findings of the report.
Prices of single-family homes rose by an average of 17% in the “National Landing” market—which comprises ZIP Codes 22202 in Arlington and 22305 in Alexandria—between the last quarter of 2018 when HQ2 was announced and the first quarter of 2020, Bright MLS found.
But home prices were only up by 10% nationwide over the same time period.
A separate 2019 report by Realtor.com found that home prices had risen 17.3% in the six months after Amazon’s announcement. That was considerably higher than the increase in the national median list price during that time, which was 5.5%.
“Housing demand picked up in Arlington, Va., after the announcement of HQ2,” Hannah Jones, senior economic analyst at Realtor.com, told MarketWatch.
She noted that demand for midpriced homes, listed at between $300,000 and $750,000 in particular, increased, which meant that buyers were finding fewer affordable homes for sale in the immediate aftermath of the HQ2 announcement.
“Home sales picked up directly after the announcement,” Jones added, “but limited affordable inventory stifled sales growth. Sale prices climbed over the year following the announcement.”