It’s being called “The Amazon Effect,” and it has everyone in the Northern Virginia, Southern Maryland, and Washington, DC areas speculating on what’s going to happen next. If you’re unaware of what the Amazon Effect is – Amazon has recently announced that it’ll be building headquarters in two new locations: New York City and Crystal City in Arlington, Virginia. Whether you’re a homeowner, investor, renter, or someone who’s a potential buyer in these areas, you know that there will be some residual effect on transportation, traffic, school availability, and home prices. We asked some of our in-house real estate experts what they think about the Amazon Effect and, as expected, reactions were varied. Here’s what they had to say.
The Hype Alone Will Have an Effect
C21 Redwood Frederick agent, Bo Clevenger, notes, “Northern Virginia is full of high-tech companies already. Realistically this is just a drop in the bucket, and it should have only a minimal impact to the area, BUT there is so much hype associated with Amazon and the HQ East that there will be unfathomed results blamed/tied to the move.”
Russ Conners, Executive Vice President and Managing Broker of our Reston office, agrees with Bo:
“The impact will be mostly on residual real estate speculation and the hype over the Amazon name. We have a job surplus locally, so it will not make as big a splash as it would in other areas where tech jobs are in shorter supply. For example, ExxonMobil left Northern Virginia with the same number of employees and the impact was not directly noticeable.
What is interesting is they chose a site in a congested area of Arlington with high-cost housing, rather than in a more flexible location for the employees they hope to attract. The addition of acres of data centers in Loudoun County will outweigh Amazon’s split HQ. That said-- public demand and sentiment will be based on headlines until the real impact for the numbers is felt when they open for business.”
Effects on Arlington, VA
Most agents believe that the Arlington, Virginia housing market will feel immediate effects due to the Amazon announcement.
“With 25,000 or more employees, and many earning six figures, home prices will increase,” says C21 Redwood Fairfax agent Nancy Freeman.
Shelly Cauthen, Operations Coordinator for our Montclair office, caught a few minutes of a news report on the first day of the announcement, which mentioned that Arlington brokers had already had numerous calls from people looking to buy in the immediate Crystal City area. “Five were looking to buy a rental, and two were looking to buy for themselves. Pretty astounding for the first day of the announcement!” She adds, “I know if I were in a position to pick up rentals… that is exactly where I would be looking!”
Cindy Stackhouse, Managing Broker and Executive Vice President of C21 Redwood Montclair and Manassas, thinks it’ll all be positive, “It has to be positive! It adds jobs as well as adding to the economy and housing, of course. But I am a glass half full girl!”
Effects Outside of Arlington, VA
“I think it will push prices up on housing west to about Reston and around Metro stations. I don't think a lot of people will plan to commute from Leesburg. I also think it will add a lot of traffic. Even if only 5,000-10,000 people try to drive into Crystal City, it will add a lot of delays. It will be great for local businesses like restaurants and car dealerships. I'd include retail stores but... Well, it's Amazon.” - Steve Makranczy, C21 Redwood Leesburg agent
“Amazon HQ2 will have a huge impact both negative and positive,” says C21 Redwood Arlington agent Karen Sparks. “It will undoubtedly keep our housing market strong but not without some challenges.” She continues her thoughts:
“I believe the urban condo and townhome market will benefit greatly. Any market close to metro and easily accessible buses will benefit. Most buyers looking for single-family homes, newer homes or want larger properties will have to move further out into Fairfax, Loudoun or Prince William counties or possibly Maryland.
Rents will also increase. Many people relocating here will opt to rent first or be younger, have homes to sell elsewhere and not able to buy initially. We could see investors start scooping up properties now. It will be an even better time to be a landlord!”
Karen also considers what the broader effect of Amazon moving into the area could have on other businesses:
“I am assuming that Amazon will have other companies riding their coattails too. That would mean more jobs and more people. And what about the service industry, building industry and other industries that are already here that will benefit from the increased needs? It's been a long time since I've sat in an economics class, but I'm thinking that the economy as a whole will benefit, not just the housing industry. Will salaries increase across the board due to a great economy? The cost of housing has been rising at a higher rate than income but if demand for all products and services in our areas increase, maybe income will too.
Crowded schools, roads and a high cost of living are the biggest negatives. A bustling economy, housing market, and low unemployment are good for everyone. My fingers are crossed that this will benefit everyone and not create a more massive socioeconomic divide.”
At the end of the day, though, we won’t know what the Amazon Effect will bring until people start moving here. As C21 Redwood Fredericksburg agent Sharon Ferguson points out, “There are too many unknown variables. What is the anticipated number of employees who will work for Amazon? In what salary range will those Amazon employees be paid? If the employees are mostly the executives, it will have a greater impact on housing than lower paid employees, especially if Amazon will be a distribution center with many warehouse employees.” Think you’d like to be a part of all the action this move may bring to the area? Let us know.