In November 2018, Amazon.com Inc. announced the construction of its second headquarters (HQ2) in Arlington County, Virginia. This significant development initially spiked single-family home prices and activity in the National Landing neighborhood and throughout Arlington. However, a recent report from Bright MLS Inc. suggests that while the announcement initially stirred the market, its long-term effects are more nuanced, especially in the context of the COVID-19 pandemic and other economic factors.
The report from Bright MLS Inc., a North Bethesda real estate data firm, synthesizes five years of housing market data since Amazon’s announcement. It reveals that the immediate reaction to Amazon’s plan to bring 25,000 employees to Arlington, of which 8,000 have been hired so far, was a frenzy in the housing market. This was particularly evident in the ratio of pending sales to new listings for condos, detached homes, and attached homes in the county. Notably, in 2019, two out of five listings in the 22202 HQ2 ZIP code referenced Amazon, underscoring the buzz around the tech giant’s move.
The report also highlights a significant appreciation in detached home prices in National Landing and Arlington, outpacing the rest of the D.C. region until the start of the pandemic. However, this appreciation decelerated with the onset of COVID-19, aligning more closely with regional trends.
Region-wide, home prices have surged almost 30% since the HQ2 announcement. The report attributes this to the slow pace of new housing development, emphasizing the scarcity of available homes as a primary driver of rising single-family home prices. The delay in Amazon’s second phase of HQ2 construction is also expected to moderate future housing market spikes, but broader supply-demand issues will continue to influence home prices in Greater Washington.
Lisa Sturtevant, chief economist for Bright MLS, notes that factors like high mortgage rates, affordability challenges, and economic uncertainty will significantly impact the housing market in the coming year. Amazon, responding to the report and criticisms similar to those it faced in Seattle, emphasized that the root cause of rising home prices is the lack of supply, not corporate growth. The company highlighted its over $1 billion investment since 2021 to create and preserve affordable homes in the D.C. region.
Local real estate agents observe that the initial excitement around HQ2 has subdued, but its influence is still a topic of discussion, particularly regarding infrastructure improvements in areas like Arlington and Alexandria.
In conclusion, while Amazon’s HQ2 has undoubtedly impacted Arlington’s real estate market, its effect is complex and interwoven with broader economic trends and the pandemic’s influence. Understanding these dynamics is crucial for anyone involved in the Greater Washington real estate market, from buyers and sellers to industry professionals.
Keywords: Amazon HQ2, Arlington real estate, National Landing, Bright MLS Inc., housing market, single-family homes, Arlington County, Greater Washington real estate, COVID-19 impact, home prices appreciation.
