The housing markets in Northern Virginia and New York City — winners of the Amazon HQ2/3 sweepstakes — are in for a jolt.
Redfin reports that search results in the oddly symmetrical zip codes of 22202 (Crystal City in Arlington County, Va.) and 11101 (Long Island City in New York) have skyrocketed in recent days. And, at least anecdotally, the interest is coming from investors looking to buy homes and rent them to future Amazon employees.
“I believe there is a lot of interest from investors who want a property they can rent out to a future Amazon employee, or possibly use for corporate housing,” Redfin agent agent Mara Gemond, who has a listing in Crystal City, said in a blog post. “Investors are betting that prices will rise quickly, and they’ll be able to rent or sell for a nice profit once Amazon comes to town.”
Redfin said search traffic from Nov. 1 through 11 rose 1049 percent for homes in Long Island City and 217 percent for Crystal City. Though Amazon just announced the winning HQ2 bids this morning, reports of a split between Northern Virginia and New York first surfaced more than a week ago.
Each of those areas will eventually be home to 25,000 Amazon jobs, and those employees will need some place to live. At least at the beginning, the real estate market seems to be betting on incoming Amazonians opting to rent rather than buy.
Leslie White, an agent in Washington, D.C, said a contingent of prospective buyers had already begun lining up in the last few weeks. Prior to the announcement, buyers considered coming in on a speculative basis to get ahead of the increased competition and inevitable price spikes, while sellers held off on putting homes on the market, betting HQ2 would allow them to list for more.
In Northern Virginia and New York City, Amazon picked areas similar to Seattle in a lot of ways, particularly the availability of tech talent. The housing markets are also similar, with high home prices and plenty of competition as the national market shows signs of slowing.
Crystal City is part of Arlington County, which is across the Potomac River from Washington, D.C. Redfin gives Arlington a “compete score” of 73 out of 100 and the average home sale price over the last month was $525,000. Long Island City is within the borough of Queens in New York, which is also a high cost area, with an average sale price over the last month of $570,000.