November marks 1 year since the Amazon HQ2 announcement, so we thought this would be a good time to explore the residual effects to come from this important decision.
In securing the deal, Amazon promised between 25,000 to 37,850 jobs coming over 15 years as a result of the new headquarters. As a point of reference, the DC Metro area brings in 34,000 jobs on average annually. Since the announcement, the corporation has worked to fulfill its promise to hire 400 employees in 2019, and has thus far filled about 200 of those spaces. According to the Washington Business Journal, Amazon should reach its target with the number of workers already hired with a start date before the final day of 2019. Amazon is expected to break ground on phase one of its new headquarters in 2020, which includes two 22-story office buildings in Pentagon City with about 67,000 square feet of ground-floor retail and 2.1 million square feet of office space in National Landing.
There was an enormous amount of hype surrounding the announcement for the first 6 months that has quieted in the latter part of 2019. Investors came to area immediately after looking to find a great deal for a cash-flow positive investment property and many were disappointed to find it difficult with high housing prices in the area. That said, with more buyers scouting in the area and already low inventory, competition has only increased throughout 2019. In the long term, we still believe housing impacts from Amazon HQ2 will be dispersed throughout the area and evolve as Amazon employees fill positions over the next decade or more. National Landing’s status as a new ‘it’ location has affected some pockets of relative affordability in South Arlington and inventory in and around Pentagon City, Crystal City, and Potomac Yard rarely sits on the market for long and is a competitive bid.
Local universities, including Virginia Tech (VT), George Mason University (GMU), the University of Maryland (UMD), and more, have already started work on expanding campuses, building new facilities near the Amazon HQ2 headquarters, and adding focuses of study and courses to provide a tech pipeline of students who can fill much of the future job demand from Amazon HQ2. GMU recently announced plans to expand their Arlington Campus with the Institute for Digital Innovation facility to focus on tech studies, and UMD is expected to open a research and event space in Crystal City called the Discovery Center. VT plans to build a Tech Innovation Campus near the new headquarters to accommodate 750 new computer science master’s students and hundreds more postdoctoral fellows.
We have seen housing prices increase this year, but still believe the major driver behind this is a lack of inventory that has gotten worse year-over-year. In addition, many homeowners held out on selling in the early part of 2019 in hopes to see even greater equity increases, further compounding the inventory shortage. A heavy sellers’ market has been the norm for a while now in the greater DC Metro area, making a competitive and difficult environment for buyers. According to the Northern Virginia Association of Realtors, total home sales are up from last year and our team’s buyers have still found good options so don’t let this influence your decision to purchase a home in the coming year.
If you are considering buying or selling contact us to discuss your strategy.