How Will Amazon’s HQ2 Affect My Property Values?

If naysayers thought that Arlington, VA was an unlikely location for Amazon’s new headquarters dubbed “HQ2,” they clearly didn’t know anything about Arlington. With the nation’s capital a mere 15 minutes away, Arlington contrasts with Washington, D.C. in some fairly distinct ways. It’s quieter. It’s safer. It’s decidedly more welcoming. It’s an entirely different way of life—one that’s reflected in the property values of Arlington real estate.

Amazon may be a retail giant that never sleeps, but the same can also be said of Arlington’s real estate market over the past few years. Less than a year after Amazon announced the 26-mile city would play host to its third global headquarters, we saw homes selling above listing price. It’s a phenomenon that might best be called the real estate equivalent of Amazon’s lauded halo effect; that interest in any one area will be positively affected by the proximity of a more successful area by default.

Arlington Real Estate, Job Growth, and the Amazon Effect

While Amazon is reportedly projecting $2.5 billion in investments towards developing their HQ2 headquarters in 2022, the real boon for Arlington real estate could very well be the result of a significantly higher labor pool. With 77% of jobs in Arlington located along corridors (including the HQ2 site, the city has never been scarce of employment opportunities in both the private and public sectors. But the cumulative effect of local economies on the real estate market can’t be underestimated.

In September 2021, the Federal Reserve Bank indicated that the unemployment rate in Arlington County was only 2.2%—a stark difference compared to the national average of 4.6%. Amazon’s investment in Arlington is estimated to create 25,000 additional jobs in the city over the next decade, even as pandemic-related safety concerns continue to remain at the forefront of every employer’s priorities. As the demand for available housing subsequently increases, so will property values. The question is: by how much?

•  Between 2010 and 2017, the average price of a new one-family home in Seattle, Amazon’s birthplace, increased by 83.4%—nearly twice the national growth rate of  46.3% during that same period.
  
  
• In March 2021, the Northern Virginia Association of Realtors® released their annual forecast of home sales in the Greater Northern Virginia Area, predicting an 11.1% increase in total annual sales by the end of 2021 compared to the previous year, but a decrease of nearly 7% compared to the surge seen in 2019.
  
  
• Data from Realtor.com indicated that the demand for luxury homes for sale in Arlington with an asking price of $1 Million increased by over 250% between 2019 and 2020, while the month of August 2020 alone saw an increase of monthly supply in Arlington by 106% year-over-year.
  
  
• According to an analysis from CoreLogic, the average price of homes for sale in Arlington peaked from a flat growth rate in September 2018 to double-digit appreciation in September 2019 following the announcement of Amazon HQ2’s move.
  
  
• A report from the multiple listing provider Bright MLS released in 2019 indicated that the median asking price for a home near the site of Amazon HQ2 in National Landing increased by nearly 100% year-over-year to $1.6 million.

Is There a Downside to Amazon HQ2 and Arlington?

Between late 2018 and 2020, Arlington County only saw a population growth rate of approximately 0.34%. While not exactly an impressive figure, the draw of Amazon and the promise of an additional 25,000 full-time residents living near Arlington may be cause to wonder if the quality of life in Arlington will be affected by an influx of new residents.

It’s not likely that the standard of living will particularly decrease in Arlington as a result of HQ2. If anything, residents are likely to enjoy a significant boost in both property values and an increase in overall purchasing power. When popular market rating provider Niche released their annual survey of Best Cities to Live in America earlier in 2021, Arlington ranked number 2 overall among 228 entries. This could largely be because Arlington’s proximity to Washington, DC has always afforded the city a relatively metropolitan lifestyle in a residential neighborhood. If anything, the presence of HQ2 may likely improve that lifestyle.

Arlington has always included a diverse mix of attractions, nightlife, restaurants, and landmarks while still maintaining a significantly lower crime rate as well as a public school system consistently ranked among the top two percent in the nation. It’s as much of an ideal city to raise a family as it is to make a career change for young professionals. That’s why the median asking price of homes for sale in Arlington reached $652,000 for a single-family in September 2021. Arlington isn’t just an easily accessible community, but a thriving one; a community that blends all the amenities of urban living with a decidedly suburban lifestyle.

The Future for Arlington After Amazon

Amazon’s HQ2 may ultimately change the face of Arlington real estate for the better. After Amazon announced it would be adding over 3,000 new jobs in Boston to its already burgeoning innovation tech centers in January 2021, the value in the city’s Housing Recovery Index immediately reached 115.2, far above the national index of 103.4. That’s in a city known for comparatively high property values as well as an established concentration of economic and educational opportunities.

Arlington may not have reached the national status of Boston, but it has its own benefits. A recent study from the National Association of Realtors placed Arlington County among the top 30 locations for remote work in 2021, with 6.6% of the population working from home. As the US increasingly moves towards a digital economy, it only makes sense that Amazon would embrace Arlington as one of its new homes. It makes even more sense that Arlington real estate will see an unprecedented boost as a result.

Whether you’re looking at homes for sale in Arlington or want to take advantage of market upswings, a professional realtor who knows the area can give you the peace of mind you need. Reach out to Brian Siebel for an experienced insight into the latest trends in Arlington real estate.