Housing Predictions and Stats for Amazon’s HQ2
November 16, 2018
Amazon’s decision to create new headquarters in Crystal City, Va., and Long Island City, N.Y., is expected to bring a boom to both cities’ housing markets and fuel rising home prices. The choice to split the retail giant’s second headquarters between two cities will not slow down the economic climb, housing analysts say.
Read more: Amazon Finally Settles on Two Cities for HQ2
Amazon will bring a 4-million-square-foot office to Long Island City in Queens, N.Y., and another headquarters of the same size to Crystal City, Va., within the Washington, D.C., metro area. About 25,000 workers will be heading to each campus, most of whom will be earning six-figure salaries.
The National Association of REALTORS®’ research team estimates that the Washington, D.C., area will need an extra 1,200 single-family and 1,050 multifamily permits on average every year over the next decade to maintain the same ratio of permits to job growth in the area. If home construction does not rise, home prices will be pressured to increase in order to meet demands, according to NAR.
The Amazon real estate effect has prominently played out in Seattle, home to Amazon’s first headquarters with about 40,000 employees. From 2010 to 2017, the average price of a new single-family home in Seattle jumped by 83.4 percent—nearly double the growth rate of new-home prices nationally, according to data from Metrostudy, a market intelligence firm.
“As Amazon’s headquarters come to fruition, the area is going to see huge price increases for all kinds of housing, rentals and for-sale products alike,” Quita Syhapanya, regional director of the Northeast region Metrostudy, told BUILDER magazine. “Developers are going to jump into the market and look for any available land opportunities to build on. Whether it’s apartments, condos, townhomes, or single-family homes, they are going to build it to meet demand.”
Rentals will also be in high demand. Long Island City already has a 98.2 percent occupancy rate and employees may have a difficult time finding an apartment for rent near their work, according to RentCafe, a rental syndication website. However, a total of about 15,400 units are under construction and planned to be near the new headquarters.
In Crystal City, employees will have access to more than 205,000 units available in the entire Washington, D.C., metro.
Both areas have seen above-average increases in monthly rent over the past year, according to RentCafe. The average rent in Crystal City is currently $2,387—up 5 percent year over year. In Long Island City, apartment rents average $3,458 and are up 5.1 percent year over year.
National Association of REALTORS®; “The Amazon Effect: How HQ2 Will Impact the NYC and DC Housing Markets,” BUILDER (Nov. 14, 2018); and “Amazon’s Move to Millennial Hubs Long Island City and Crystal City Expected to Spark an Apartment Boom,” RentCafe (Nov. 13, 2018)
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Updated: February 15, 2019