Amazon's Insane Effect on Northern Virginia Home Values
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Amazon's announcement to establish its second headquarters here in Nova in November 2018, known as HQ2, in Northern Virginia has caused a significant shift in the local real estate scene. The economic opportunities stemming from this development, along with an influx of thousands of skilled employees, have greatly influenced the housing market in the area.
The influx of professionals seeking homes near HQ2 has intensified competition among homebuyers, leading to a tightened housing market characterized by limited inventory and escalating prices.
Amazon has officially launched phase one of the project and has already hired 8000 employees, with plans to bring a total of 25,000 new jobs to the area. The investment has cost Amazon 2.5 billion dollars.
Surging Home Prices Amidst Increased Demand
With demand outpacing supply, housing prices in Northern Virginia have witnessed a significant upward trend. Reports indicate consistent growth in home prices, reflecting the implications of the HQ2 announcement. However, the impact and rate of increase vary across neighborhoods and property types.
Interestingly, the effects of Amazon's arrival have not been evenly distributed across the region. Neighborhoods close to the HQ2 site, such as Crystal City and the newly coined "National Landing," have experienced notable price appreciation. The allure of convenience and amenities in these thriving communities has made them sought-after destinations for Amazon employees and other professionals.
A Boon for Home Sellers
Amazon's arrival in Northern Virginia has opened up potentially lucrative opportunities for homeowners. The increased demand and limited inventory have created a seller's market, where homeowners may be able to secure competitive offers and achieve quicker sales.
The current real estate climate makes it an opportune time for homeowners to consider selling. Working with a seasoned real estate agent familiar with the intricacies of the local market can help sellers navigate the sales process effectively, maximizing their potential returns.
Implications for Homebuyers
On the other side of the coin, prospective homebuyers face a competitive market scenario. Given the influence of Amazon's arrival, potential buyers need to be prepared to act quickly and decisively.
However, it's not all challenges for homebuyers. With careful planning, a clear budget, and the right real estate professional, homebuyers can still secure their dream homes despite heightened competition. Though challenging, the evolving market conditions can yield rewarding results for determined buyers.
A Deeper Look at the Data
In November 2018, well over a year before the onset of Covid, the median sold price of homes in Arlington was $565,000. In June of 2023, it had risen to $652,000, representing a 15% increase. Homes are also selling significantly faster, averaging 20 days on the market, compared to 38 days before Amazon’s announcement. While Amazon is not the sole influencing factor, Covid has been inconsequential in most of our daily lives for over a year now.
According to a recent article by Inman News, the Amazon headquarters has created a new luxury boom in the region, with home prices ranging from $900,000 to $2.49 million. This surge has particularly brought several new high-rise luxury condo buildings to Arlington and Alexandria.
In other areas, the change has been even more dramatic. Alexandria City, for example, has seen its median sold price jump to $702,500 from $548,500, reflecting an increase of 28%. Median sold prices in Prince William County are up well over 50%, from $351,250 to $550,000. In Haymarket, located in Prince William, prices have gone from $472,000 to $706,000. The change is even more remarkable when considering that the increase in interest rates theoretically pushes current prices down.
This trend is also observable in other counties. In Fairfax County, the median sold price rose 44% from $499,975 to $721,900. Falls Church saw its prices increase from $510,000 to $774,000. Even further out in Loudoun County, the median sold price went from $485,000 to $689,000, marking an increase of 42%. Leesburg, which has numerous new luxury neighborhoods, saw its median sales price rise from $470,000 to $755,000.
With companies like Boeing, Raytheon, and Nestle moving their headquarters and Amazon continuing to fill additional jobs, it is likely that we will still see a strong market in Northern Virginia!
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Chris Colgan
EXP Realty LLC
Licensed In Virginia VA DPOR # 0225 075803 703-485-1435