Amazon’s HQ2 has caused a housing boom in Virginia, as the two closest cities to the Crystal City-headquarters—Alexandria and Arlington—are the two most competitive markets in the nation, according to a report from Redfin.
“The Amazon HQ2 effect has become a permanent factor in the Arlington and Alexandria housing markets,” said Redfin listing agent Marcia Burgos-Stone. “Some sellers are still opting to hold on to their homes and wait until it becomes a more concrete reality in the hopes that they’ll get more money. This has led to a shortage of homes for sale, which puts pressure on buyers who are concerned that they’ll be left behind if they can’t find a home before things get too heated up.”
Redfin added that cities adjacent to HQ2 are going under contract faster than the national average, and the D.C. metro. It took just 11 days in July for homes to leave the market in Arlington, and 14 days in Alexandria, which is a week quicker than last July. The national average is 38 days and 27 days in the D.C. area.
The report states that 57% of homes in both Arlington and Alexandria went off the market in two weeks or less. Just 40% of homes in D.C. and 29% percent of homes nationally were able to accomplish that.
Demand for housing near Crystal City has had an impact on inventory, however, as the number of homes for sales fell annually by 50% in July. Fewer demand is causing prices to rise with 46% of homes in Arlington sold for more than the listing price. Thirty-six percent of homes in Alexandria sold for more than the listing price.
Redfin states that average sales price for a home in Alexandria and Arlington is $490,000 and $616,000, respectively. Both are considerably higher than the average sales price in the D.C. area of $421,500 and $318,100 nationally.
“A market can become highly competitive when buyers agree that home values will increase steeply in the future, “said Redfin Chief Economist Daryl Fairweather. “If you believe home values will go up hundreds of thousands of dollars in the next five years, you will race to bid five or ten thousand dollars above asking price today. So, even though it may take a decade for Amazon’s HQ2 to grow the size of the Seattle headquarters, attracting high-earners and driving economic growth in the surrounding area, homebuyers and home sellers are already operating under the assumption that there will be strong demand for homes going forward.”
Grand Rapids, Michigan; Oakland, California; and Tacoma, Washington; were also included in the nation’s most competitive markets.