Amazon expects to create 25k jobs at HQ2 Arlington. But remember, these 25k new Amazonians will not start working tomorrow or the day after, and they won’t all show up at once. There will be a transition period, and in a large metropolitan area like ours, these numbers are easily absorbed into the existing infrastructure. DC is not Seattle—this region has developed public transportation systems and millions of daily commuters. We also have ready access to two major airports (with BWI being a close third).
The impact will go beyond housing and effect local economies. I think the impact on local businesses will be significant and beneficial. One thing to remember is that areas like Crystal City currently have a large existing pool of restaurants, bars, etc that should experience a nice increase in patronage with the influx of new blood into the area.
How will this influx of people impact local real estate? Great question!
The first question that comes to mind, where will these employees come from? DC has an excellent labor pool that Amazon can tap into. So how many new people will be moving the area is really a guess.
That said, it’s expected there will be “two waves” in the real estate market: For the first 6 to 18 months the trend will be rentals. This will be followed by a buying wave.
The next question is affordability. We have one of the highest costs of living in the country here in DC. The average salary range at Amazon’s HQ2 will between $100k – $150k. This salary range will most likely attract millennials (23-38 year olds). With a $100k-$150k income, a person(s) typically afford to buy homes priced in the $400k to $500k range. So, a youngish workforce that can qualify for something under $500k? In our area, that probably means the condo and townhouse market will see a bit of a bump from Amazonians.
Another note and statistic: 71% of buyers don’t want to or know how to upgrade or renovate homes. Translation: Most people want move-in ready homes.
So what’s happening right now in our real estate market?
Home searches have skyrocketed but that’s just people looking. There are price increases – sellers are testing the market with higher prices. We’ll need to see how that plays out, or not.
Investors are pounding homeowners looking for potential flips
Sellers who have a longer timeline are ‘watching’.
The take away? With the exception in the spike of Internet home searches, things are much the same as they’ve been for some time.
So from want I see, Amazon’s move mean more jobs to NOVA. Job growth impacts the local economy in a positive way. Sweet!
From a real estate standpoint—the influx in new buyers could lead to a small bump in the housing market. Affordability will push buyers to areas they can qualify and afford. Nothing-new here. Just biz as usual in DC.
Questions, Comments, Concerns? Contact me anytime!