Amazon’s long-awaited HQ2 announcement arrived earlier this month: The tech giant will be splitting their new headquarters between Queens’ Long Island City neighborhood in New York City and the Crystal City neighborhood in Arlington, Virginia — with about 25,000 employees expected in each location.
So, what will an influx of these jobs mean for the real estate markets in Long Island City and Crystal City?
We can get some hints from looking at Seattle
If you talk to anyone who’s looked for a place to buy or rent in Seattle over the past few years, they’ll probably give you an earful about the impact of Amazon on the market. Competition has gone up, and median prices have skyrocketed at a rate outpacing national growth. They’ve nearly doubled in the span of four years.
Even though the Seattle market cooled a bit this fall, housing remains more expensive than it was a few years ago.
Long Island City in New York City, New York
Long Island City is just a subway ride from Manhattan, and people are flocking there for real estate that’s more affordable than what’s downtown. Old warehouses and shuttered businesses are coming down, and pricey high-rise apartments and condos are going up.
- There are actually more listings in Long Island City now than there were two years ago, but high demand has caused a spike in prices. Our data show properties are sitting on the market about 10% longer than they did two years ago, but sale prices have leapt by about $100,000 — a jump of 22%. In other words, demand is high enough that sellers can wait for an offer they like.
- The disparity between listing prices and sales prices has also widened. Two years ago, homes sold for about $50,000 over the listing price. Now, that number is closer to $125,000.
- The residential real estate market isn’t the only one to watch. There aren’t a ton of restaurants, bars, and coffee shops in Long Island City right now — but that’s sure to change when 25,000 high-income employees start working there every day.
- We don’t know how many employees will be existing residents versus people who move to New York for HQ2.
In short, Long Island City was already growing quickly without Amazon – and HQ2 would speed up that process, likely with some growing pains along the way. A bigger question is whether there’s another nearby neighborhood that stands to blossom as the workforce in Long Island City expands.
Crystal City in Arlington, Virginia
Technically, Amazon is opening an HQ2 in “National Landing” — a new neighborhood that will include parts of Crystal City and Pentagon City. But to keep things simple, we’ll call it Crystal City.
Because the Crystal City real estate market had already been expanding, the area has a little more infrastructure in place – a walkable downtown, for example. But similar to Long Island City, housing demand has been on the rise for a while in Crystal City.
- Just a few miles from Washington DC, Crystal City previously housed many employees who worked at the nearby Pentagon (they’ve since been gradually relocated).
- Our data show that sales prices have increased 2% in Crystal City over the past two years, but inventory has shrunk by 26%.
- The number of days houses sit on the market has decreased by 9% as well, and HQ2 is likely to drive up competition even further.
- The influx of employees will be gradual, giving Crystal City some breathing room and opportunity to develop even more in the next 5-7 years.
This move could drive up prices in more distant Virginia suburbs as people are priced out of the neighborhood. Though, some say this is already happening because of rising housing prices in the DC area.
What does this mean for me as an agent?
Like we mentioned above, we don’t know what percentage of Amazon employees will be existing residents or people who are new to the area. For people who aren’t familiar with the area, there’s one place almost all of them are going to look for a real estate agent: Google.
If you’re in the New York City or DC metro areas, you should get your Google business profile up and running now so it has plenty of time to grow (building trust with both Google and those who search for you), show up in more search results, and garner positive reviews.
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