In the January 2018 Home Value Forecast, we predicted northern Virginia would be the likely winner in the Amazon HQ2 sweepstakes. Ten months later we find we were half right, as Amazon has decided to split HQ2, with new campuses in Arlington, VA (Pentagon City and Crystal City in Arlington, Potomac Yard in Alexandria) and Queens, NY (Long Island City).
Amazon’s stated decision criteria included the following:
- Metro area with more than a million people.
- Stable and business-friendly environment with the potential to attract and retain strong talent.
- Presence and support of a diverse population.
- Access to transportation.
- An overall high quality of life and a strong university system.
Alexandria and Queens check the most boxes, and with a reported $573 million and $1.5 billion in incentives respectively, they definitely are business-friendly. But what about the real estate markets?
Prices in Queens and Alexandria are both on the rise, trending above the CBSA trends and outpacing statewide averages.
This shows that both markets were already “hot,” but the addition of Amazon only further fuels the trend.
In Long Island City, both single family homes and condo are both averaging over $1 million sale prices.
In Alexandria, prices are a little bit more in reach, especially in the condo market.
In both metros, Amazon will impact the housing markets, but it won’t be transformative. Both of these communities have been and will continue to be hubs of commerce and politics, and growth would have come with or without Amazon.
If Amazon was more interested in transforming a metro, they would have chosen from one of the 20 finalists that is still finding its way after the switch to the new knowledge-based economy, metros like Chicago, Columbus, Indianapolis or Pittsburgh.
Instead, it looks like “the potential to attract and retain strong talent” won out, as both D.C. and New York are in the top nine for educated populations. HVF will continue to monitor these metros as the new headquarters take shape.
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Home Value Forecast (HVF) is brought to you by Pro Teck Valuation Services. HVF provides insight into the current and future state of the U.S. housing market, and delivers 14 market snapshot graphs from the top 30 CBSAs.
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