Is the 'Amazon effect' still boosting HQ2 housing markets?

by Steve Randall24 May 2019

When Amazon announced the cities that would be the locations for its new North American headquarters to supplement Seattle, there was an as-expected impact on the housing markets.

The decision of the retail behemoth to make Arlington, VA and Queens, NY, key locations for its growing operations meant a 50% boost for home sales in Arlington and Queen’s neighboring market of Manhattan.

But the subsequent decision of Amazon to pull out of the planned New York location has meant a cooling of the Manhattan market while Arlington remains hot.

This is shown in an analysis of the two markets by realtor.com which reveals that  to date, Arlington has seen six-figure (17%) median list price growth of $110,000 and a more than 40% drop in inventory, while Manhattan has had a comparatively weak price increase of less than 3% growth of $40,000, and only a 3% decrease in inventory.

"With a household name as big as Amazon moving into Arlington's backyard, we expected that home prices were going to increase, but because the number of homes for sale is not keeping up with demand, the price growth we've witnessed so far in both the mid-market and luxury sector has been dramatic," said Danielle Hale, realtor.com's chief economist. "Meanwhile, Manhattan's housing market, which boomed in November following the announcement, has cooled off after Amazon decided to pull out of the city."

Luxury boost for Arlington
Inventory in the Arlington area is struggling to cope with the surge in demand and realtor.com’s April data shows that the number of active listings was down 48.2% to less than 400 listings -- a massive year-over-year drop in inventory.

The impact of the Amazon decisions has been shown most significantly in the luxury sector, amid an expectation of high salary employees.

Luxury asking prices in Arlington reached $2.4 million in April, up 22.1% year-over-year while sales of million-dollar homes increased by 34.8%.

In the surrounding area of Northern Virginia luxury prices reached $1.6 million, up 10.5% year-over-year, while sales of million-dollar homes increased by 45.7%.

List Prices

Arlington, Va.

Manhattan, N.Y.

Nov. Median List Price

$640,000

$1,650,000

Apr. Median List Price

$750,000

$1,690,000

Dollar Difference

$110,000

$40,000

Percent Difference

17.30%

2.40%

Inventory

Arlington, Va.

Manhattan, N.Y.

Nov. Inventory

594

8,275

Apr. Inventory

356

8,015

Unit Difference

- 238

- 260

Percent Difference

- 40.1%

- 3.1%

Sales Prices

Arlington, Va.

Manhattan, N.Y.

Nov. Sales Prices

$560,000

$1,160,000

Feb. Sales Prices

$550,000

$960,000

Dollar Difference

- 10,500

- $203,000

Percent Difference

-1.9%

- 17.5%

Sales Count

Arlington, Va.

Manhattan, N.Y.

Nov. Sales Count

204

922

Feb. Sales Count

181

729

Count Difference

- 23

- 193

Percent Difference

- 11.3%

- 20.9%


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