The Amazon Effect, aka the Reason I Decided To Purchase My First Home

All evidence is pointing towards Crystal City following Amazon’s announcement that they are in “late-stage discussions” with two cities. This information is not news to anyone -- we have been hearing it for months -- but with the final announcement right around the corner, let’s talk about what this means...and why I decided to bite the bullet and become a homeowner.  

-- It is likely HQ2 will be split between two cities, this now means fewer jobs; Seattle saw an influx of 50,000 jobs overtime, so hypothetically, if the division is 50/50 we could see 25,000 jobs coming to Crystal City. That's still a lot of people!

-- On top of that, for every job Amazon creates, another job is created nearby.

-- This will launch D.C. as a serious Tech Hub that will, over time, drive other companies to come to the area.

 One thing’s for sure: if HQ2 comes here, we will be seeing a huge influx of people to our area over the next few years. An influx of people who need places to live…bring on the Amazon effect!For Seattle, it was a perfect storm. Interest rates were historically low, it was the very beginning of the housing recovery, and in six years their real estate prices went up 100 percent. We are in a slightly different climate here in the D.C. metro area. Interest rates, while not very high, are on the climb, and our housing prices are already quite high compared to the national average. On top of that, we are about twice the size of Seattle, meaning the impact on supply and demand will be a fraction.  

What you can expect:

With more demand will come a lot of development. Be prepared for a huge transformation of the Crystal City/Pentagon City/Potomac Yard corridor into a more inviting, vibrant, and walkable community along Route 1, with more retail, better office space, and more housing. We are expecting this development to continue right on down into Alexandria. Thoughts on the next few years: 

Immediate impact

• Millennial Amazon employees will rent before they buy. High-end buildings in and around Crystal City will be in high demand.
• Homeowners who were previously hesitant about buying will get off the sidelines and buy before all the new competition arrives.
• Speculators will start buying property around Crystal City.

1-2 years

• Homeowners around Crystal City who didn’t need to sell immediately and held off will start to list their homes. Likely these homes will go in multiple offer situations for slightly higher prices than they would have the previous year.

3-5 years

• The mid-range housing market ($400,000-$700,000) will start to feel pressure as young Amazon employees begin to buy

  

Why I decided to buy now:

I have been living at home for the last two and a half years, saving as much money as possible and have been considering buying for a while. When it started to become clear that Northern Virginia was a top contender for Amazon, I thought why wait and take the risk of being out bid and getting priced out of the market. As a first-time home buyer, I had a very tight budget, a budget I knew a lot of millennial Amazon employees would fall into as well. Rather than waiting to see how everything is going to play out, I made the decision to jump into the housing market, and I think I am going to be very happy I did!In conclusion, if Amazon comes, there will be quite a shakeup. The high demand in housing will spur new development and a rise in prices. While we are not expecting to see the same price explosion as Seattle, we will see stable and sustainable growth, with prices rising slowly and steadily.

For anyone who is questioning whether to buy or sell now or wait to see what happens, give us a call!We would be happy to discuss your unique situation and help guide you to the best decision for you.