Amazon recently announced their selection of Crystal City – Arlington, VA as the future home of one of their two additional headquarters. The news was met with delight and trepidation by the Northern Virginia and general Metro community.
Homeowners, naturally, had visions of dollar bills dancing through their heads as they anticipated accelerated appreciation of their homes. Commuters feared traffic congestion beyond present levels. Developers envisioned windfall profits.
Increased employment, greater appreciation, and profits, oh my!
A few facts (as presented by NVAR and their panel of experts during their December 12 presentation on the “Amazon Effect” at George Mason Business):
- Amazon HQ2 will be located in Crystal City which is part of South Arlington. That areas has been renamed, National Landing.
- The HQ2 timeframe will be 16 years to complete the process.
- 25,000 employees (will be really 38,000 jobs) are expected.
- 75% of the effect will be “inside the Beltway.”
- The Washington, D.C. area is larger and denser than Seattle.
- The absorption rate is expected to be about 1% per year over the 16 years.
- The biggest bump in real estate values came to the Arlington area in early fall 2018.
- The arrival of Amazon does not increase the housing demand significantly over time.
- The residential markets with greatest impact will be Arlington and Alexandria.
- The average Amazon employee income is expected to be approximately $150,000
- The employees will flock to the best schools.
- The Amazon Effect will not only impact residential, but commercial properties, as well,
- Existing real estate problems of supply and affordability will remain.
The six experts all warned to guard against the “hype wave” and to be strategic.
The KEY: this will be a 16 year project, which according to the experts, will be absorbed within ordinary area growth.
The question asked almost daily, “How will this event impact our real estate value?” is best answered by, “The impact happened at the anticipation phase.”